What’s the future of the news business? As if the continuous bleeding of daily newspapers was not enough, the bright young things of digital news are also in crisis. Thousands of people have been laid-off at BuzzFeed, Vice, Vox, Mic, and Huffington Post. It is easy to see that news has become a much smaller business with a profitability that, at the very best, will not satisfy most of the companies made powerful by a golden century of daily newspapers – and nowhere near the scale of digital-only companies that once seemed sustainable. The need now to depend on reader revenues more than advertising is one obstacle but, equally challenging, is the drive for entirely new digital business models rather than tweaking those that served publishers so well in print. The defining issue of all digital media is that reader-users-viewers can be persuaded to pay but only really for exclusive content they cannot find anywhere else. The generally-available news that continues to dominate the print and digital output of daily news brands will not cut it, especially when sold as part of an indivisible bundle. It is 18 years since iTunes started selling individual songs instead of whole albums, and yet most dailies stick with the all-or-nothing bundle even in digital -because they are trying to defend their print profits. Newspapers are left to contemplate a future of being squeezed both by the digital behemoths and the agile specialists. It’s a fate that once befell medium-sized airlines, squashed between world leaders and budget carriers. For most news media, the future is all about targeting a niche not the Facebook mass market. The latest candidate aiming for specialist success is Tortoise Media, being launched in the UK as a “slow news” publisher of a daily smartphone edition of five stories. The service, which invites readers to attend editorial meetings and plans to publish a quarterly print magazine of “big reads”, is headed by James Harding, former editor-in-chief of The Times and of the BBC, and former Wall Street Journal president Katie Vanneck-Smith. Their manifesto is clear enough: “We hope that, if we take a little longer and open up the process of journalism, we can better understand these problems and foster new ideas. We’re trying to come to a better informed point of view on our future. In that sense, we’re journalism as a jury, with a hell of a caseload.” Tortoise went live with a daily newsletter in January (published, pointedly, at 11am London time, rather than for the start-of-day commuter journey) and launches formally in April. Statutory filings show it has raised some £6m from a combination of crowd funding and well-heeled individuals including former US Ambassador in London (and chief Obama fundraiser) Mathew Barzun. Vanneck-Smith says: “Slow news sums up a way of looking at the world – critically but reflectively and, wherever we can, optimistically. As humans, we can’t possibly see everything. So we’re not going to cover everything – part of being slow is about making choices, and taking our time to make those choices… making sure that as many people as possible are proactively engaged in contributing to the answers in a meaningful way, not just a vox pop thrown together on a street corner. You can’t do that in the normal news cycle.” The editorial meetings, to which members are invited and guests can pay to £25 to attend, are a fascinating experiment: “It is a forum for civilised disagreement. Modelled on what we call a ‘leader conference’ in the UK (or an editorial board in the US), it is a place where everyone has a seat at the table. It’s where we get to hear what you think, drawn from your experience, energy and expertise. It’s where, together, we sift through what we know to come to a clear, concise point of view. It is the heart of what we do at Tortoise.” You sense that the insightful and well-written Tortoise has been inspired by the “explainer journalism” of Vox and Quartz and also by Axios, another US news startup from the founder of Politico which claims to have “almost” reached breakeven on advertising alone within two years of launch, ahead of a subscription product launch. But it also chimes with Jessica Lessin’s neatly-profitable The Information, with which it shares an emphasis on content quality not quantity, subscriptions, and no advertising. Tortoise’s soft-voice informality and its enthusiasm for reader interaction echoes The Information’s sense of community. When it comes to the hard financials, Harding’s 40-person team (30 of them journalists, including some UK stars) may bring annual costs to some £5m. With 6k current subscribers paying an average of £70, the company might expect to reach 20k subscribers soon after launch and perhaps 30k within 12 months. If so, annualised income would be some £2-3m, producing an initial operating deficit of perhaps £2-3m per year after launch. So, even without any additional debt, the shareholders’ initial £5.8m can give the company up to three years of funding. So far so good. But they’ve got to get and keep those subscriptions, and there are plans to expand the staff and also to internationalise the service. So, Tortoise may be budgeting for a much quicker subscriptions build-up. It is, though, projecting a break-even at 80-120k subscriptions – comparable with the 190-year-old UK political weekly The Spectator and the stylish digest The Week. This subscriptions target (which would produce annual revenues of some £6-7m) seems a bit steep. Not everyone will agree with one existing Tortoise subscriber who says: “It’s the news equivalent of dipping your head in a cool, glacier-fresh stream on a scorching-hot day.” But the experienced team is full of pre-launch euphoria. Despite familiar warnings that journalists often don’t make brilliant business people and some inevitable sniffiness about James Harding’s news idealism, Tortoise’s millennial-skewed audience will get the attention of UK newspapers. It will also help to illuminate the uniquely high-value of the opinion pages in quality daily newspapers – which is what Tortoise is (sort of) trying to be. This launch might, therefore, motivate some dailies somewhere to try packaging up their op-ed pages for a digital audience that doesn’t want all the news. Harding’s old paper The Times will jealousy guard its hard-won 140k subscriptions (out of a total daily circulation of 400k) with price and content wars if it starts to feel threatened. You wonder whether solid progress by Tortoise might even prompt a group of columnists to band together to offer their own direct-to-reader subscription service. Or some may defect to Tortoise. Any such shifts could leave some newspapers and magazines looking a bit, well, naked. Will Tortoise help to kick-start the unbundling of daily news media? It might just galvanise the UK’s vintage news brands.
Liz Moseley, of Tortoise Media, will explain the news startup’s strategy at the Digital Media Strategies 2019 Conference in London 2-3 April. Click the banner at the top of this screen.
B2B information. Incisive Media, of the UK, has acquired the 21-year-old Financial Services Forum membership community for marketing professionals in finance. The Forum is estimated to have 150 member organisations and a revenue of perhaps £1m with EBITDA margins of up to 20%. Incisive was founded in 1994 by media entrepreneur Tim Weller (ex VNU, Centaur, and Reuters), with the launch of Investment Week in the UK heyday of classified recruitment advertising. He started the business with little capital, a house in negative equity and three children under five years old. Incisive IPOd in 2000 with a market cap of some £70m. By 2006, when Weller led an Apax-backed MBO, its value was £275m. The following year it stretched out to acquire American Lawyer from Wasserstein for $630m – just in time for the world banking crisis to blow the company apart. The ALM company was bought back by Wasserstein in 2014 – for some $400m. Incisive’s portfolio of B2B brands includes Computing, Professional Pensions, CRM, Professional Adviser – and Investment Week. It is now privately-owned (by its directors) with projected 2019 revenue of £25m and 170 staff. With EBITDA margins of some 18% and a debt-free balance sheet, the company (with Weller as chair and Jonathon Whiteley as CEO) is celebrating its 25th anniversary far removed from a bumpy history of private equity and bank debt. It is now signalling a renewed ambition to grow strongly in its financial services and tech markets. More deals on the way.
Broadcast. CBS has acquired the remaining 50% stake in the cable network Pop held by Lions Gate Entertainment Corp., giving it complete ownership of the channel. The network, which airs series like “Schitt’s Creek,” had previously been a 50-50 venture between the two companies. Terms of the deal weren’t disclosed. CBS acquired its initial 50% stake in the channel for $100m in 2013 when it was known as the TV Guide Network. Since that purchase, the channel’s ratings among key demographics have declined and its national reach has fallen by 15%.
Broadcast. Bauer Media, Europe’s largest commercial radio group, is to acquire the UKRD Group, owner of ten regional radio stations across England, adding to its recent acquisitions of Wireless Local, Celador Radio and Linc FM. With a weekly reach of 722,000 listeners, UKRD Group represents a substantial addition to Bauer’s existing audience, bringing it closer to new regional markets across Yorkshire, East Anglia and the south of England. Transaction terms were not disclosed.
B2C Digital. Canada-based mountain bike website Pinkbike has acquired the road cycling site CyclingTips.com from BikeExchange. CyclingTips was founded in 2008 in Australia. CyclingTips merged with BikeExchange, an online marketplace, in 2015. It began US coverage soon after. Transaction terms were not disclosed.
B2C Digital. Gegs Capital Corp is acquiring for $27.5m, UMG Media, an eSports company in North America, offering gaming entertainment, live events and online play. UMG entered eSports in 2016 with the acquisition of UMG Events LLC which was founded in 2012. UMG has approximately 2.1m registered users and over 18m matches played live and online through its platform. UMG made $2.35m revenue in 2018 but is heavily loss-making.
Exhibitions. Diversified Communications, of the US, has bought from Germany-based Solar Promotion International and FMMI, three annual energy-related events held in San Francisco. Diversified will organize the Intersolar, ees and Power2Drive North America events, and relocate them to San Diego next February. Terms were not disclosed.
B2B Information. A property search specialist based in Colchester, UK, has been acquired by Dye & Durham Corporation, a provider of software for the legal and professional services sectors. Index Property Information was formed out of the demise of the home information pack era by three founding partners who all ran successful local search companies. Transaction terms were not disclosed.
The internet demands media specialisation, whether in content, delivery or audience. Arguably, that’s a reversal from the heyday of print media when advertising often upstaged copy sales, relegated readers and pushed for ever larger audiences because that produced even more ads. Free “promotional” copies, constrained cover prices, and non-core readers were, perversely, good for profits.
The sugar-rush strategies only caused self-inflicted wounds when Google and LinkedIn arrived to suck up the advertising. For all the talk of journalism being subsidised by ads, those same clients also funded what became unsustainable increases in costs and staffing. Beyond all else, print media enjoyed decades of limited competition, due to their scale economies in print, distribution and sales. But, in a largely post-advertising world, the search for a sustainable business model now goes back to readers. Nowhere is this clearer than in B2B media which was long dominated by racks of single-sector trade magazines published by magazine conglomerates, especially in the UK and US.
Whether or not print survives in any given business and professional sector is less important than the fact that (in most cases) it can now only be relatively small, compared with the rich potential for live information, events and services. The internet has brought into the realms of B2B media a range of high-value business services that were once provided by other specialists. Some B2B media companies now provide consulting, executive search, market price reporting, research, and workflow systems as well as news, data, and events. These immersive strategies enable “narrow but deep” specialists to develop diversified and recurring revenues beyond the whims of advertisers, and to be embedded into their global markets and be not just, well, media.
This attractive model of integration is helping to create an increasing number of single-sector specialists, especially in the UK, where recruitment classified advertising and a handful of large companies had, for decades, accounted for more than 100% of all B2B magazine profits. Here are some stand-out UK examples:
The private equity-owned AgriBriefing was launched in 2010 by long-time B2B executives. Its path from operating as a UK-centric publisher of digital and print media, medical and agriculture sectors to becoming an increasingly global specialist in food and farming is a perfect case study. The fledgling company’s emphasis on creating membership, building events, and acquiring high-value data including ‘price reporting agencies’ helped it deliver strong growth, not least in the revenues of the 175-year-old Farmers Guardian weekly. It also motivated the founders to ditch media and medical and seek global leadership in food and farming. The success was consolidated by acquisition of the 40-year-old LAMMA agricultural machinery show, the launch of the CropTec exhibition for arable farming, and LAMMA Exchange machinery digital classifieds. Then came the rapid climb up the B2B value chain with well-targeted data-rich acquisitions. In 2014, AgriBriefing paid some £300k for the Agrimoney investment site which gave a foothold in the international agribusiness and commodities market, where it claimed 70,000 users in 170 countries. Next came the complementary £13m acquisition of Global Data Systems, the France-based owner of FeedInfo, the pricing platform for global animal feed. In 2017, it plunged into the US market with the £17m acquisition of Urner Barry, the 160-year-old provider of news and prices in the poultry, egg, meat, and seafood segments of the food industry. That deal alone was said to have added more than 3,000 clients. Now, the once UK-centric business has some £30m revenues, 50% from non-UK markets, and more than 50% from subscriptions/membership. EBITDA profit margins are estimated to be some 30%, and the total audience is claimed to comprise some 500k agribusiness professionals in 200 countries. The company is now believed to be negotiating the acquisition of Informa’s £30m-revenue Agribusiness Intelligence and Inflexion’s £40m-revenue Kynetec. If these deals are concluded, they would make AgriBriefing a clear leader in global farming-food prices, research and consulting – with considerable scope for further consolidation of what has been a heavily fragmented market. The appetising combination would turn the nine-year-old B2B startup into an international information specialist employing some 500 people, with £100m of revenue, perhaps £40m EBITDA and a valuation of more than £400m.
Carnyx Group, publisher of The Drum information and services for the international media, marketing and advertising industries, was founded in Scotland in 1984 to publish B2B magazines initially in architecture, law – and marketing. More than 15 years later, it chose to concentrate on the media-marketing sectors – and to go global. Today, The Drum (formerly ScotMedia) has an estimated revenue of £8-10m, EBITDA margin of c10%, and 90 people in Glasgow, London, New York and Singapore. It is “the most widely read marketing web site in Europe” with a claimed 1m monthly visitors, 30% from outside the UK. CEO Diane Young says the company’s base in Glasgow contributed significantly to The Drum’s success: “It’s… a little bit of luck I suppose from where we came from in Scotland. You couldn’t sustain different magazines for all the different parts of marketing for PR, design and advertising so we covered them all and, as time has gone on, the market has changed so that actually all the different disciplines are converging.” The Scottish base also gave the company low costs and an ability to survive those early painful years and to build audiences patiently. Unlike key competitors Marketing Week and Campaign in the UK and Advertising Age in the US, The Drum’s lively web site is free while revenues are generated from content marketing, research – and 30 annual events (which account for 40% of revenues and perhaps 100% of the profit). The company has also built its impressive Recommended Agency Register “that helps brands to choose agencies based on ratings. It is a bit like TripAdvisor where you don’t just blindly go in and you know, choose your agency. You get some real insight into what it is like to work with them.” It is easy to sense that, after years of struggling, The Drum (still owned by its three founders) is on the brink of major breakthrough. There are all kinds of companies which might value it highly, including Penske (Deadline, Variety and WWD), Crain (Ad Age and Creativity), Centaur Media (Marketing Week, eConsultancy, Festival of Marketing, and Oystercatchers), Haymarket (Campaign, Brand Republic and PR Week), and Prometheus (Hollywood Reporter and Billboard). Perhaps one of them will want to get The Drum’s team to manage their own properties in the sector, a sort of reverse takeover. A world of possibilities.
Jacobs Media Group
It is 10 years since the restless travel entrepreneur Clive Jacobs acquired the UK trade magazine Travel Weekly from Reed Elsevier. It had once been part of the expensively global and ultimately ill-fated Reed Travel Group, incorporating not just Travel Weekly in the US and across Asia but also the OAG aviation data group, and Hotel & Travel Index. But Jacobs bought the UK edition as Reed’s local subsidiary made its big shift from domestic B2B print to global data-tech. Most of Reed’s non-UK travel operations (including Travel Weekly in the US and Asia) became part of what is now the Wasserstein-owned Northstar Travel Media. Three years after buying Travel Weekly, Jacobs Media Group (JMG) acquired an even longer established print brand from Reed, The Caterer. The six years since have witnessed JMG’s transformation from a dependance on print to what is rapidly becoming an international events business. It self-describes as “Europe’s largest travel & hospitality B2B media company” and is believed to have made 2018 adjusted EBITDA of £1.3m (2017: £893k) on £11.5m revenue (£10.6m). Revenue has more than doubled in the past five years, almost exclusively through organic development. It is believed that some 50% of revenues (and rising) come from events and about 30% from outside the UK, a substantial shift in the past few years. The company, whose “newer” brands include Travolution, Aspire, Connections, and ATAS, operates more than 120 events annually. JMG still publishes the print trade magazines with which it started but now claims 650k monthly uniques for its travel and hospitality web sites. The privately-owned, London-based JMG has impressively weaponised its print brands and seems to have found plenty of growth by pushing into events and internationally. You can bet that companies like Northstar, Ascential, and OAG are keeping watch on Jacobs. Perhaps even exhibition organisers like the UK’s Tarsus and Reed (both of which have travel trade shows) might just be reviewing the options. But consumer operators like CNN and Discovery’s Travel Channel, and the UK’s travel-involved Daily Mail and Telegraph newspapers may also be followers. You also wonder where the upstart Skift might figure in this sector’s deals in the future.
The 15-year-old London-based Procurement Leaders (formerly called Sigaria) has given a voice to an international market of professionals once known primarily as ‘purchasing directors’ but now mostly Chief Purchasing Officers or Procurement Directors. It was founded by Alex Martinez, Mark Perera and Richard Pope as “a global membership network serving major corporations and procurement, sourcing and supply chain executives.” It provides independent intelligence, professional development and peer-to-peer networking through online, events, publishing and training. It has an international client base of some 700 leading companies with 15,000 members and hundreds of thousands of senior executives accessing online news, benchmarking and other services each year. The company employs some 120 people (50% in membership functions) spread across offices in the UK, US, and India – and has revenue of £12.3m. It exploits the rising importance of procurement in international companies which now realise that these functions can be the key to strategic supplier relationships, production security, reputation, and risk management. Martinez got the idea for Procurement Leaders while working for a recruitment software company almost 20 years ago, during the crazy times of the first dotcom boom. He found himself selling to purchasing departments and realised that these executives were often the unsung heroes, seen as the difficult people who pared down budgets and struck fear into the hearts of visiting sales people. But, all their hard work found its way straight to the bottom line. Martinez and his co-founders (none of whom had previous experience either in media or purchasing) set out to extract and centralise the knowledge from among the best minds in procurement and share the insights with a wider group via the whole range of platforms. They quickly discovered how readily even highly-competitive companies would share information in order to get something valuable (other people’s data) in return. Procurement Leaders, 60% of whose revenue is membership subscriptions (39% is events), is growing strongly on the back of its unique database – intellectual property provided (and constantly updated) by the membership itself. CEO Nandini Basuthakur says CPOs are uniquely able to learn from their thousands of suppliers in many of the world’s best companies. Her “Supplier Enabled Innovation Centre” is intended to emphasise the opportunity that CPOs have to improve the efficiency of their own companies. The capacity of Procurement Leaders to grow substantially is underlined by its 2017 results. While revenue was up by 8% to £12.3m, adjusted EBITDA actually dropped by 18% to £938k. But this reflected a strategy to increase membership revenues by adopting corporate enterprise licenses instead of a seat-based license model. This has resulted in 35% growth in the average value of annual membership contracts. This is almost certain to have produced strong profit growth in 2018. A sign of the expansion potential, after a fair few years of erratic financial performance, is the geographical profile of revenues which – in 2017 – were 36% from the UK, 28% each from the US and from Europe, the Middle East and Africa. The US and Asia were the fastest growing. It is revealing to hear members of Procurement Leaders talk about the company as if it is a professional association; they have a strong sense of belonging. It’s the kind of relationship and support that companies of all kinds would die for and that includes the major consulting firms that will – one day – be lining up to acquire the still privately-owned company.
These are just four examples of B2B specialists in the UK which are increasingly attracting the attention of investors, especially in private equity. But there are many other single-sector B2B companies with £10-20m-revenue in, for example, the finance, law, education and film/TV sectors. Not all would even think of themselves as media companies. But they share a commitment to the information requirements and relationships of a specific market sector.
Some (like Procurement Leaders) are funded largely by their readers/members. Others (like The Drum and Jacobs) are more dependant on events. Some (like AgriBriefing and Jacobs) have used traditional media as a springboard to international expansion in digital media and events. Some are more obviously embedded in their markets than others but all are focused single-sector specialists.
Most have not gone very far at all in seeking to “own” key industry statistical information in their sectors, which would be nirvana for any data business and whose compilation remains easier for specialist publishers than almost anyone else. But, together, these entrepreneurial UK-based companies do demonstrate the breadth of high-value business opportunities in individual sectors. To think, B2B media success was once all about publishing trade magazines in as many sectors as possible.
B2B. The UK-based Times Higher Education (THE) has been sold to private equity firm Inflexion, becoming a stand-alone business for the first time. The deal follows THE’s carve-out from its parent company TES Global. THE was previously owned by US-based TPG Capital, and along with its long-time stable partner TES (formerly Times Educational Supplement) has been owned by a series of private equity firms since 2005. Transaction terms were not disclosed.
B2C digital. UK-based tech-mag company Future Plc has acquired US digital publisher Mobile Nations for a price which could eventually total $120m. This acquisition further extends Future‘s reach in the US. Mobile Nations’ properties focus on consumer electronics, combining content, community and e-commerce. Notable brands include Android Central, iMore, Windows Central and Thrifter with a monthly audience of over 40m technology enthusiasts. Mobile Nations had 2018 revenue of $16.4m and EBITDA of $8.2m. The initial cash consideration is $55m with a further $5m in shares. In addition, a further variable deferred consideration up to a total value of $60m will be paid, subject to meeting financial targets in the year ending 31 March 2020. The deferred consideration is expected to be split equally between cash and shares in Future, although Future retains the right to pay the full balance in cash.
B2C digital. The Utusan Group, a media conglomerate in Malaysia, has acquired a 60% stake in Media House Entertainment (MHE TV), an entertainment news portal in Malyasia that provides trending news and videos covering celebrities, food and travel. Transaction terms were not disclosed.
Exhibitions. Launched in 1993, the annual, Mumbai-based BIG7 event is India’s largest trade event for gifts, stationery, writing instruments, office supplies, gadgets, houseware and home décor. Transaction terms were not disclosed.
B2B. The Financial Times has acquired a controlling stake in the Amsterdam-based TNW (The Next Web), an events and media company with a focus on new technology and startups in Europe. Transaction terms were not disclosed. The deal would fit well with what is rumoured to be an impending investment in the San Francisco-based tech newsletter The Information.
B2C digital. Bauer Media Group has acquired CrediMarket, a Spanish e-commerce platform for financial products. This acquisition is Bauer’s first move into the Spanish OCP (Online Comparison Platform) market. Bauer Media Group also owns OCPs in Finland, Norway and Sweden (Zmarta), the Czech Republic, Slovakia (NetBrokers Holding) and Poland (Rankomat). Transaction terms were not disclosed.
B2B information. Daily Mail and General Trust (DMGT), which holds more than 49% of Euromoney Institutional Investor, and is its largest shareholder and founding investor, plans to return all of its shares in Euromoney Institutional Investor and £200m cash to eligible shareholders.
Education. The Newhouse family-owned Advance has agreed to acquire Turnitin, a leading provider of education technology for academic integrity and writing solutions, from an investment entity affiliated with Insight Venture Partners, GIC and their co-investors. Turnitin serves over 15,000 institutions globally and is headquartered in Oakland, Calif., with international offices in the UK, Netherlands, Australia, Korea, India, and throughout Latin America. Transaction terms were not disclosed.
Broadcast. The Atlanta-based company, which currently owns or operates television stations and digital properties in 91 television markets, will sell WCAV-TV and WVAW-TV to a Lockwood Broadcasting Inc. affiliate and acquire WVIR-TV from Waterman Broadcasting Corp. Gray anticipates closing the transactions after receiving approvals in the second or third quarter. Transaction terms were not disclosed.
Exhibitions. The Paris-based GL Events, has agreed to acquire 55% of CIEC, the State-owned China International Exhibition Center Group. After the acquisition, the government will retain a 39% stake in CIEC, with its executives holding 6%. It is, to say, the least, unusual to see an international company owning a controlling stake in a Chinese State-owned enterprise and is said to reflect the strong relationships GL has built in the country over the last decade. CIEC has some 100 full-time employees. Revenues in 2019 are expected to be €40m (US$45m), with an operating margin of more than 35%. CIEC organises several events larger than 100,000 gross sq m, including Beijing Fabric Wallpaper Expo, Build & Décor Expo, the China International Door Expo and ISH China & CIHE serving China’s heating, ventilation and air conditioning industries. Transaction terms were not disclosed. The 40-year-old GL Events is one of the world’s 20 largest exhibition organisers, operating in 20 countries, with total revenue of some €1bn. It is a company listed on the Euronext Paris In addition to its owned exhibitions (accounting for c20% of group revenues), manages a network of 40 exhibitions and concert venues. Its exhibitions include: the Rio International Book Fair, Kidexpo, Exponaval and Piscine Global Europe.
B2B information. The US subsidiary of Haymarket Media Group has acquired the Florida-based National Association for Continuing Education (NACE) which provides live and online education programs for doctors. Although financials have not been disclosed, it is believed to have revenues of under $10m and will increase Haymarket’s medical information revenues by 10%. NACE annually organises 40 regional conferences, and will add 53,000 learners to Haymarket’s audience of 2.2m healthcare professionals. The admittedly modest acquisition almost marks the rehabilitation of the 53-year-old UK-based magazine publisher whose borrowings of more than £140m had once threatened its viability. The privately-owned group has been a dominant UK player both in B2B and specialist consumer media for more than 50 years, but found itself caught in a perfect storm. The post-digital shredding of print profits was accelerated by Haymarket’s own decision to debt-finance the buyback of large minority shareholdings from key executives who had managed the business for more than 25 years during founder Michael Heseltine’s political career, latterly as the UK’s Deputy Prime Minister. After a prolonged wobble, the company succeeded in eliminating its debt through property disposals, staff cuts, and the sale of 20 magazine, event and digital brands. A lot of pain. But, in 2017-18, Haymarket’s revenue was £163m (slightly down on the previous year) giving operating profit of £7.4m. While even that profit is flattered by some discontinued earnings, it is a picture of transformation. The disposals of the past six years tell the story of a company that has had to be as opportunistic in selling magazines as it had so often been in buying them. In 2016, it sold Motorsport, Motoring News, F1, and Autosport – magazine brands which had been at the core of the company’s long-time passion for motoring media. But the proceeds of some £13m were certainly useful. Last year, it netted £14m (perhaps 30 x EBITDA) for five typically-Haymarket consumer magazines (including Stuff, What HiFi? and FourFourTwo) sold variously to Future and Kelsey. Along the way, Haymarket sold, for nominal prices, six predominantly B2B magazines and events which may now account for 15% of the £50m revenue of the fast-growing Mark Allen Group. Last year, it even sold one of its great digital successes, PistonHeads , which it had transformed from a nerdy audience of 900k to 4m monthly uniques in 11 years. It is believed to have been generating a steady EBITDA of £1m at a 40% margin. But an estimated offer of £12-15m persuaded Haymarket to sell a business it had originally acquired for £1m. The breakthrough breathe-again deal, though, had been the £80m windfall sale of its Thames riverside film studios in 2015. Phew. All the deals leave Haymarket as a largely B2B information, content marketing and events company focused on established media and events primarily in the marketing-communications and medical sectors. Its key brands include: Campaign, Media Week, PR Week, Brand Republic, GP, Medeconomics, Mims, Finance Asia, and Management Today. Haymarket built its reputation by giving B2B magazines (like the legendary 50-year-old ad magazine Campaign) the design and content values of the sharpest consumer media. It was a pioneer too in the highly-profitable awards ceremonies that now crowd every B2B market, and in consumer exhibitions (it sold its JV with BBC Magazines in 2013). It’s always been great at events. In the 20th century heyday of the UK magazine market, Haymarket was a company which did things in style. It was no accident that Campaign effectively launched Saatchi & Saatchi in the 1970s (one of the brothers had worked for Haymarket): both companies seemed to share a sense of excitement and innovation. Although Haymarket retains some consumer brands (including What Car?, Autocar, and Classic & Sports Car), 80% of its c£145m global revenues now come from B2B (40% in the US, which generates 45% of the company’s medical market revenue). Some 52% of revenues come from the UK, 35% from the US, and 13% from Germany, India, Hong Kong and Singapore. For all the financial agony and snap disposals, Haymarket seems to have landed in a good place, with digital media now comprising 50% of revenue, events 25% and print less than 25%. The domestic pressures can be seen to have helped Haymarket fast-forward through traditional media’s own disruption, even though times are not easy. It has probably helped that, for all the churn and change, the company has been steady at the top. It’s still owned by the family of chair Rupert Heseltine. Lifer Kevin Costello has been CEO for a decade. They’re back.
Magazines. Dennis Publishing, the UK-owned publisher of the best-selling news digest The Week, in the UK and US, has acquired the 99-year-old Kiplinger Washington Editors, Inc. Kiplinger publishes the eponymous paid-subscription newsletters in business and personal finance. Its most widely read products are: Kiplinger’s Personal Finance, the 600k-circulation monthly magazine which is credited with having pioneered US personal finance journalism in 1947, and Kiplinger. com, its website with 4m monthly uniques. The company, which was founded in 1920 in Washington, DC, has been managed by three generations of the Kiplinger family. Dennis is a UK-based magazine publisher, founded in 1974 by the late Felix Dennis. The £190m-revenue company was sold to Exponent private equity for £170m last year. The Kiplinger deal is likely to figure largely in the expansion of The Week in the US, which currently has 550k paid-for print subscribers and 5.8m monthly uniques. But its brands might also be part of the strategy for Dennis’ UK-based Money Week. The Week’s readership success is based on its concise, well-written summaries and genuine balance in an increasingly polarised news landscape. It is believed to have ambitions to expand to other markets in Asia and Europe on the way to becoming a global print and digital brand. But this round of private equity ownership is focused on the US edition, evidenced by the inspired appointment of Jack Griffin (ex CEO of Tribune, Time Inc and Meredith) as Chair of Dennis. While the company remains a significant publisher of motoring, tech and hobby magazines in the UK, its profitability – and future growth – are heavily dependant on The Week. It will be interesting to see how many other specialist news-information businesses Dennis now seeks to acquire in the US and UK – and whether such activity is punctuated by the divestment of its traditional, low-growth magazines.
B2B information. Endeavor Business Media, of Nashville, has acquired former PennWell publishing properties from the Blackstone-owned Clarion Events including print and digital brands covering oil and gas, industrial technology, dentistry and water utilities. Transaction terms were not disclosed. The publishing assets had been part of a reputed $300m deal last year, focused primarily on growing Clarion’s exhibitions business. The acquisition grows the 18-month-old Endeavor to nearly $100m in revenue. It has more than 40 print and digital brands, 40 events, and almost 400 people. Its key markets include security, aircraft technology and healthcare. The company’s private equity sponsor is Nashville-based Resolute Capital Partners.
Exhibitions. Messe Düsseldorf’s India subsidiary has acquired the Famdent dental exhibition. The event will become a member of the MEDICAlliance, the umbrella brand for Messe Düsseldorf Group’s global healthcare exhibitions. Transaction terms were not disclosed. Messe Düsseldorf is the world’s 10th largest exhibitions organiser (by revenue) according to AMR.
Magazines. California-based Vinesse Wines has acquired Touring & Tasting Marketing and Media, the 23-year-old print and digital magazine which aims to promote “wine tourism”. The acquisition will enable it to: increase print circulation to 70k, twice a year and grow digital reach to 150k.
Broadcast-streaming. Nielsen has acquired Sorenson Media, a leading addressable TV technology provider that aims to help transform TV from a ‘one-to-many to a one-to-one’ medium by powering addressable ad delivery and measurement. Transaction terms were not disclosed.
Exhibitions. CyberRisk Alliance, the four-month-old B2B startup serving the cybersecurity and information-risk management market, has acquired the InfoSec World Conference and Expo from Southborough, Massachusetts-based MIS Training Institute. The 25-year-old show, which attracts 1,300 attendees and hosts 10,000 square feet of exhibit space in Orlando in April, is the first acquisition for CyberRisk Alliance, a company launched in November by CEO Doug Manoni (ex CEO of SourceMedia) and backed by the private-equity firm Growth Catalyst Partners which said: “This is an important milestone for CyberRisk Alliance, and it exemplifies our commitment to aggressively build a powerful and influential business-intelligence company serving this market of vital importance to our national and global security and economy.” Manoni has said he wants to build a $100m company within five years. Transaction terms were not disclosed.
Entertainment. Reach4entertainment enterprises plc (R4E), a UK-based entertainment production group (market cap: £15m), is to acquire 50% of Buzz 16 Productions Ltd. The terms of the deal were not disclosed. Buzz 16, which was founded in 2016, creates sports content and is co-owned by shareholders including former Manchester United footballer and broadcaster, Gary Neville, and former Sky Sports Premier League producer Scott Melvin. The R4E CEO is Marc Boyan, founder of the music-based investor Miroma, and the chair is Michael Grade, former Chair of the BBC and ITV. After a period of restructuring, the company (which is listed on the UK’s secondary AIM market) recently said trading had been ahead of its expectations.
Exhibitions. After two years of intensifying M&A, another of the world’s leading exhibitions groups, the Brussels-based Easyfairs, is believed to be up for sale. The private company owns 218 events in 18 countries across Europe, the UK, China, Russia, UAE, and the US. It is estimated to have revenues of some €180m and EBITDA of €35m. In addition to its trade shows, it operates 10 exhibition venues (totalling 225k sq m) in Belgium, the Netherlands and Sweden which host up to 500 events for other organisers. The 22-year-old company, which has trebled profits in the past five years, is among the world’s 10 largest independent exhibitions groups with B2B events in the energy, packaging, logistics, transport and healthcare sectors; it’s the 18th largest organiser overall, and employs some 800 people. The founder and owner is Eric Everard, a prominent Belgian entrepreneur who was once a director of Reed Exhibitions, responsible for the Cannes-based Mipcom and MipTV. He founded Artexis (venues) in 1997 and launched the European Student Fair a year later. Sixteen years on, he formed Easyfairs International to launch exhibitions, and merged the two companies in 2014. Easyfairs executives claim that 80% of the group’s profits have been reinvested in launching and buying shows and that the company has, therefore, been able to grow by an average of 13% throughout the past 20 years as it became progressively more international. It has been particularly successful in geo-cloning its packaging and storage exhibitions. But the step-change came with the 2016 acquisition of the Dutch group Evenementenhal which organises more than 70 B2B trade shows in agriculture, transport, logistics, automotive, shipping and construction. It also operates three venues in the Netherlands. The deal largely accounted for a 39% increase in revenues and catapulted Easyfairs into AMR’s global top 20 of exhibition organisers. Perfect timing. It is believed that many of the leading exhibitions groups and a long list of private equity firms are now interested in acquiring the company. In so many ways, it has the type of solid profitability, growth prospects and sector-leading portfolio that made Mack Brooks (with 30 exhibitions in 14 countries) such an attraction when it was auctioned late last year. But there are differences. Industry insiders reckon Easyfairs is heavily dependant on its hands-on founder who is still both CEO and chairman; and the venue management business (10% of Easyfairs) would be non-core for many exhibitions organisers – but, not of course, for the large city/state-owned exhibition hall owners in Europe and Asia. Those factors may make private equity firms the favourites to pay a possible €550m for Easyfairs. It seems unlikely that Reed Exhibitions will seek to acquire Easyfairs so soon after paying some €230m for Mack Brooks in the deal which completed this week. But it may be a prime target for the UK’s cashed-up Daily Mail Group (DMGT) which was last year outbid by Clarion Events for the $300m Penwell. The voracious Clarion will be in the frame again (its Blackstone private equity parent owns exhibition venues too). But will DMGT be hungrier this time for an acquisition which would almost double its exhibitions portfolio – and fit well with its energy and construction events, especially in the Middle East? It is assumed that Informa, still digesting UBM, will not be bidding for Easyfairs, and neither will the Paris-based Comexposium which is undergoing a change of shareholders. One of the wilder scenarios could see the merger of Easyfairs into Reed Exhibitions in order to IPO, which could be a neat result for the Everard family – and for the RELX parent for which Reed remains a strong but distinctly non-core asset. Maybe. But it’s sure to be another hot auction in a global exhibitions market where (in the latest survey by trade body UFI) up to 40% of companies said 2018 profits were 10% up on the previous year. No wonder private equity loves exhibitions.
Why are trade shows so hot? At the Digital Media Strategies 2019 conference in London on 2-3 April, Philip Soar, Chairman of exhibitions group CloserStill, will examine the enduring appeal of B2B trade shows and the role of digital technology now and in the future.
Exhibitions. France-owned Comexposium, the world’s sixth largest exhibitions group, has acquired IMOS, claimed to be the largest motorcycle show in Indonesia, which has been held every two years since 2014. It will be managed in a joint venture with Amara Pameran. Transaction terms were not disclosed. Amara Group manages over 20 trade exhibitions, seminars and consumer events, including JVs with Tarsus, Köln Messe – and Comexposium.
B2C digital. The A$6bn Seek, the largest jobs digital in the AsiaPacific, has acquired GradConnection in a move to target young jobseekers finishing up their education. Transaction terms were not disclosed. GradConnection was launched in Australia in 2008 by New Zealanders, Mike Casey, Dave Jenkins and Dan Purchas.
Broadcast-streaming. The privately-owned Georgia, US-based Cox Enterprises has reached an agreement with Apollo Global Management to sell a majority interest in Cox TV stations and also in its Ohio radio, newspaper and TV properties. Cox Enterprises will maintain a minority stake and will join the Apollo Funds in forming a new company to operate these stations, which will be headquartered in Atlanta. Cox TV stations in Atlanta, Charlotte, North Carolina, Seattle, and Boston, reach a combined 31m viewers.
Education. Pearson Plc is selling its US K12 courseware business to Nexus Capital Management for a headline consideration of $250m. Total proceeds comprise an initial cash payment of $25m and an unconditional vendor note for $225m expected to be repaid in 3-7 years. Following repayment of the vendor note, Pearson is entitled to 20% of future cash flows to equity holders and 20% of net proceeds in the event the business is sold.
Magazines. Sanoma is selling Mood for Magazines (MfM), publisher of personality magazine Linda, to Linda de Mol, its founder and minority shareholder. In 2018, MfM has revenues of €27m and EBITDA of €6m. Sanoma’s 86% share is being acquired for the equivalent of 7.9 x EBITDA – valuing the company at €47m. It has 53 employees.
Magazines. As part of its strategic refocusing around book publishing and retail travel, the Lagardère group completed the sale of most of its magazines in France (employing some 650 people) including: Elle, Version Femina, Art & Décoration, Télé 7 Jours, France Dimanche, Ici Paris and Public, to Czech Media Invest (CMI). The Lagardère group remains the owner of the Elle brand but has licensed its use to CMI in France, and to Hearst Corp internationally under a US$650m deal in 2011. The price of the French deal was €52m, for a business which, in 2018, generated revenue of c€239m and adjusted EBIT of c€22m. So Lagardere, whose Hachette subsidiary was once the world’s largest magazines group, has drawn down the curtain on almost 200 years.
News. The Nikkei-owned, UK-based Financial Times is believed to be negotiating to acquire or invest in The Information, the subscription-based digital media company founded by Jessica Lessin in 2013. The Information derives some 90% of its revenue from subscriptions (the rest from events) and more than 10,000 subscribers pay $399 for a service which now employs more than 20 tech reporters and has been profitable for more than two years. Subscribers get two exclusive (and sometimes ground-breaking) stories a day, invitations to networking events round the world, access to compelling telephone conferences, subscriber summits, and the sense of being part of Jessica’s network as one of the best-connected people in Silicon Valley. The content includes detailed organisation charts of leading tech companies and “courses” of emails on specific themes. Some media commentators were once sceptical about the all-subscriptions/ no-advertising strategy. But that was when the ads-supported BuzzFeed, HuffPost and Vice were spending like slam-dunk winners. It’s all different now. Quartz is adding subscriptions, so is Business Insider which led the sceptics at the launch of The Information. BI’s owner Axel Springer recognises that paid-for newsletters are the future of so much quality journalism. Everybody is following Jessica Lessin, and the business model for the upcoming UK launch of Tortoise (“slow journalism”) smacks of The Information. Many observers (and Lessin herself) actually believe she pitched the subscription price too low, evidenced by the high pass-on readership and a negligible churn rate. She is now selling gilt-edged VIP subs to (sort of) make up for it. The point is that this brilliant media success is based on the production of high-quality content you can’t get anywhere else – wrapped in some smart personalisation. It was Lessin’s frustration as a tech reporter on the Wall Street Journal that first got her thinking about the flaws of a conflicted journalistic model which depended on revenue from advertising as well as readers. She became fascinated by Politico and its ability to build a loyal paying audience, despite the prevalence of free content. Six years later, she says: “We’ve moved markets, gotten the early scoop on billions of dollars of acquisitions and told you what’s happening deep inside companies like Apple, Facebook and Google. Our stories have been followed by the Wall Street Journal, the New York Times, Bloomberg and other major outlets thousands of times. How we compete is simple. We recruit the best reporters, give them the freedom to write about important topics and tell them not to worry about the small stuff.” She used family money to start the San Francisco-based business and owns it 100%. It’s a funding model that has imposed a distinctly unfashionable sense of financial discipline – and has given her independence. But the obvious question she has been debating with a small group of advisors (including Politico and Axios founder Jim VandeHei, Paul Steiger, chair of ProPublica, and Tina Sharkey, of Sherpa Capital) is: how to grow from here? She has identified fintech, biotech and media as key areas of expansion. The 900k-subscribers, £300m-revenue FT likes Lessin’s strategy and has been discussing ways it could help to accelerate the growth, especially in Asia. The FT’s global reputation as a solid long-term supporter of quality journalism and also a supportive business partner has more than survived its 2015 acquisition by Nikkei. It could be a great fit for The Information if they get the structure and the deal right. Lessin has said: “We are pretty ambitious and we don’t want to close off an opportunity because it means joining up with an investor. But it would have to be a case of an investor helping us to go after a big opportunity we couldn’t go after alone.” Is that the signal the FT was looking for?
Magazines. Future Plc is re-acquiring from Immediate Media two professional road cycling magazines, the digital-only CyclingNews and the print ProCycling, which had been part of a cycling portfolio it had sold to Immediate for £24m in 2014. The Burda-owned Immediate has no plans to sell the other brands from that original deal including Cycling Plus, Mountain Biking UK and BikeRadar. The brands now being bought back by Future are reported to have advertising-heavy revenues of some £2m and an estimated EBITDA margin of at least 15%. It is believed Future is paying some £2-3m to re-acquire the magazines which it had sold at a time when the UK listed company had issued a profits warning followed by a 30% share price slump, the loss of 170 jobs – and a change of CEO. It is a long five years since then, and CEO Zillah Byng-Thorne has substantially transformed the formerly print-dominant, UK-centric Future into a £460m, debt-free, multi-media group with proprietary tech and diversified revenue streams, almost 50% in the US. This year, it is expected to make EBITDA profit of £34m (from £176m revenue) – some 60% ahead of 2018. Earnings per share are forecast to increase by 15%. The growth is being strongly driven by e-commerce and events in games, music, home interest, hobbies and associated B2B media. Key brands include TechRadar, PC Gamer, Tom’s Guide, Homebuilding & Renovating Show, GamesRadar, The Photography Show, Top Ten Reviews, Live Science, Guitar World, MusicRadar, Space. com and Tom’s Hardware. Future continues to be a significant print publisher with over 80 publications and some 500 bookazines per year. The 17% increase in Future’s share price in the past three months speaks volumes for investor confidence in the successful integration of last year’s major US acquisition of Purch – and of the likelihood of further deals in 2019.
Zillah Byng-Thorne, CEO of Future Plc, will be a keynote speaker at the Digital Media Strategies 2019 conference in London on 2-3 April, presented by Campaign magazine and Flashes & Flames.
B2C Digital. DMG Media Ireland (part of the UK’s Daily Mail Group), has acquired RollerCoaster.ie, a leading website about pregnancy and parenting in Ireland. Transaction terms not disclosed.
Broadcast. Gray Television is moving into new markets in New York and Minnesota via a purchase of United Communications TV stations. Gray will pay $45m total purchase price for the stations: WWNY-TV and WNYF-CD in Watertown, N.Y., and KEYC-TV in Mankato, Minn.
B2B information. The previously-announced $6.9bn sale of Dun & Bradstreet to an investor group led by CC Capital Partners, LLC, Cannae Holdings, Inc., Bilcar, LLC, Black Knight, Inc. and funds affiliated with Thomas H. Lee Partners, LP has now completed.
B2B information. Data analytics company Nielsen is the winning bidder for the assets of bankrupt television data provider Sorenson Media Inc, at a price of $11.25m.
Consumer events. Live Nation has acquired a majority stake in leading Spanish promoter Planet Events. Spanish media conglomerate Grupo PRISA will retain partial ownership of Planet Events and will continue to operate from the PRISA offices in Madrid. Transaction terms were not disclosed.
Radio. Bauer Media is acquiring the Wireless Group’s local radio stations in England and Wales, which claim a weekly reach of 850,000 listeners, adding to the purchase of Celador Radio and Lincs FM Group earlier this week which is an additional 1.1 million listeners. Wireless comprises 15 licences across Lancashire, Cheshire, Shropshire, Derbyshire, West Yorkshire, Staffordshire and South Wales. Celador adds 25 licences across East Anglia, Thames Valley, Solent and the South West and Lincs FM Group comprises of nine licences across Lincolnshire, Yorkshire and Rutland. Bauer is Europe’s largest radio group (with channels in the UK, Scandinavia, Poland and Germany) but is second to Global in the UK.
B2C Digital. Entertainment Daily owner Digitalbox, of the UK, has acquired Mashed Productions, the parent company of Daily Mash, for £1.2m. Digitalbox was recently bought out by investment firm Polemos in a £10m deal, which saw the holding company adopt the Digitalbox name and lay out plans to build a digital media company through acquistion. UK-based Mash Productions made £135k in pretax profit in the year to March 2018. The media brand also made a noted move into TV production with BBC Two’s The Mash Report.
Magazines. Alabama publishing veteran Matthew Allen has acquired the Birmingham Fun and Family Magazine from Jay Carr, who owned the publication for 14 years. Allen formed JBMC Media LLC to make the purchase. The monthly publication was launched in 1999 for parents, expectant parents and grandparents, and is available free at more than 350 locations in metro Birmingham, Alabama.
Radio. Entercom Communications Corp., one of the two largest radio broadcasters in the US, announced a definitive agreement to acquire NASH FM 94.7 in New York City, and the stations WMAS and WHLL in Springfield, Minnesota, from Cumulus Media Inc.
Exhibitions. Informa Plc, which became the world’s largest exhibitions organiser in 2018 with its £3.8bn acquisition of UBM, has begun divesting non-core operations with the $100m sale of its life sciences portfolio to MJH Associates. The New Jersey-based publisher of Pharmacy Times, Dentist’s Money Digest, and Contemporary Clinic (advised by Oaklins DeSilva + Phillips), now claims to be the largest medical media group in the US. The properties acquired from Informa include: Medical Economics and Dermatology Times; animal care titles including DVM360 and Vetted; Spectroscopy and BioPharm International; Dental Products Report; and three veterinarian conferences. The deal is one of at least three that Informa is hoping to complete in the next few weeks. As the UK-listed company prepares to report its 2018 results and success in squeezing post-acquisition cost savings from UBM, the relatively small disposals are the easy bit. Informa now has some 400 events brands, including 24 of the 250 largest exhibitions in the US. But – unlike UBM – it’s still also a large-scale business and professional publisher. That’s not a challenge – for now. But investment analysts, who had warmed to CEO Stephen Carter’s audacious exhibitions strategy, are now a bit more edgy about the evident risks in buying UBM complete with scarcely-digested major acquisitions in the US and Asia. It is just four years since one analyst described UBM’s then $1bn acquisition of Advanstar in the US as “a big and brave strategic move” and raised “questions about its quality and growth potential…”. Informa executives say they never expected to get the same kind of early performance from UBM’s portfolio as from their existing events, which is just as well because the 2018 growth rate of UBM exhibitions may have been one-third lower than those of Informa. Much of the disappointment is down to Advanstar’s largest events, for the fashion industry. Last year, Informa nervously told investors: “We’ve now had a chance to pore over…both the Advanstar acquisition and the bolt-on acquisitions that were done following… And, in round numbers, that business was targeted to do around $200m of revenue by the end of 2018, and it’s currently tracking to do about $150m.” In Las Vegas this week, Informa insiders joked about whether the $15m investment pledged by executives to their largest event, the twice-yearly Magic fashion convention, was “new” money or just “lost” profit from UBM. The early wobble underlines the risk taken by Informa in acquiring a business that had so recently narrowed down to exhibitions after decades of being across almost everything in media, consumer and B2B. That’s presumably one reason why UBM – which had been actively shedding its information and publishing businesses – still had a long tail of under-profitable events. But the warning signs were everywhere on Advanstar, a company with a patchy portfolio and a colourful history of being bought, sold and going bust. There’s no panic because Informa’s tightly-managed core business may be doing much better than investors expected – and UBM only a little bit worse. The reality means having to pedal harder to justify an exhibitions strategy which commits to:
- Global growth through ‘geo-cloning’ of exhibitions
- Embedding data services into event platforms
Those familiar objectives go to the heart of why four rival companies, each operating in more than 30 countries, are chasing Informa for global leadership in exhibitions. They all believe in the scale economies of worldwide events, especially in the developing nations of Asia, and are appetised by relatively fragmented exhibition ownership: there’s a lot of consolidation still to come. But the success of geo-cloning in any exhibitions sector frequently depends as much on the local circumstances of markets, competition and venues as on the strength of the brands. Likewise, it is not clear exactly how data will help to future-proof trade shows and, indeed, what is the potential risk of digital disruption. The Informa difference is that, for now, it’s sticking with its publishing and information businesses. It’s only the latest major company to believe that these can help to grow exhibitions. Many others (including Reed and UBM) tried but gave up publishing to became exhibition specialists. It’s easy to see why. Unlike most traditional media, the $30bn global exhibitions industry has been growing, in real, terms consistently for much of the past 15 years, even though the great fear is whether they can be digitally disrupted. Informa and its trade show rivals are variously involved in plans to build year-round buyer-visitor digital relationships. Although “online exhibitions” and webinars have mostly under-delivered, it is easy to believe that the rising cost of exhibition participation (not to mention the cost, hassle and interruption-risks to travel) may help to spawn digital solutions that capture the imagination – and at least some of the revenues – of exhibitors. But Informa’s CEO has other things on his mind. His investor presentations amplify the supposed synergies between Informa’s ‘business intelligence’ and its exhibitions. But the company which claims its £500m-revenue Taylor & Francis academic publishing “is an information business with similarities to, and cross-over with, the rest of the group in areas such as content production, data management and digital delivery” doesn’t even dare to connect that with exhibitions. It’s not unusual, of course, for CEOs to want to retain soundly profitable divisions, however peripheral they have become. But it is clear that Informa’s forecast of £3bn revenues within two years (and EBITDA margins of 32%+) will come 60% from exhibitions. The company describes itself self-consciously as being “at the heart of the Knowledge and Information Economy… one of the world’s leading B2B Events, Information Services, and Upper Level Academic Publishing businesses.” So, it’s a conglomerate. Informa’s 2017 numbers are instructive: exhibition revenues grew by 8% but everything else increased by 2% or less. While the company, which grew out of the 1998 merger of International Business Communications and Lloyd’s List, quietly fillets its B2B information group with the expected divestment of its agribusiness portfolio (reportedly to AgriBriefing) and IGM credit/FX, investors may start to question the role of academic publishing which (pre-UBM) was responsible for 30% of Informa’s revenue, 38% of operating profit and its highest margins. The £200m+ of academic profit comes from 2,700 journals and no fewer than 140,000 books, including 7,000 new editions every year. The questions keep coming with operations that are 53% dependent on subscriptions but 47% on single copy sales, and the fact that less than 30% of the books revenue is digital. The division is expected to grow by 2% in 2018 but may actually be worth some £3bn (or 40% of Informa’s current market cap) to one of the larger STM players. It may take a major new exhibitions target (the shaky Emerald Expositions in the US?), some trading squalls – or approaches from Springer Nature, Wolters Kluwer, Wiley or private equity – to persuade Informa to cash-in the academic publisher that was a £500m bargain back in 2004. Or will RELX, the STM and business-tech monolith, want to swap Taylor & Francis (and some cash) for its distinctly non-core £300m-profit Reed Exhibitions? Either way, the smart money is on Informa becoming an events-only business. A bit like UBM.
Magazines. The privately-owned Penske Media Corporation, of New York (publisher of Women’s Wear Daily, Variety, Deadline, Robb Report and almost 20 other magazine-centric brands) has purchased the remaining 49% stake in the 52-year-old Rolling Stone from Singapore-based BandLab Technologies. The deal gives it full ownership of the magazine including the international editions (formerly been managed by BandLab which had failed in 2017 to buy the 51% then acquired by Penske). BandLab, which is believed to have paid $40m for its 49% in 2016 (while Penske paid $50m for his 51%), is a digital music sharing company founded by Kuok Meng Ru. the son of a Singapore agribusiness entrepreneur who co-owns the world’s largest palm oil producer. Last year, BandLab acquired the UK magazines MusicTech and The Guitar from UK-based Anthem Publishing and Kuok is believed to be interested in buying the music magazines from TI Media (ex Time Inc UK), which include the monthly Uncut and the digital-only NME. BandLab’s service is used by millions around the world to make, share and collaborate in music. Meng Kuok also owns a Singapore-based online guitar retailer and a music merchandise company in San Francisco. After his abortive bid to acquire overall control of Rolling Stone last year, he professed to being happy to “share” the magazine and was effusive about the brand’s growth prospects: “It’s not just a media brand. It’s much more than that. It references and reflects, and also influences and sets the tone for pop culture. That gives it tremendous opportunities. It’s not a one-dimensional brand. It also has a chance to be a global brand.” That enthusiasm is why the music nut Kuok’s decision now to sell-out is such a surprise, unless something in the terms of the 2017 auction gave him little choice. On the other hand, having to cope with the competing interests of Penske and two generations of the Wenner family may just have proved too much (both founder Jan and his son Gus are directly involved despite selling their shares). Or the financials may just have become too troublesome. At Rolling Stone, Jay Penske is seen by staffers as a saviour of print for what he did at Variety, with his launch of women’s magazine Muse from the Robb Report and the expanded pagination of Rolling Stone itself, as a monthly. The 16-year-old New York-based Penske company, which claims a monthly, all-media audience of 180m, is controlled by the founder, digital entrepreneur (and sometime racing driver) who controversially last year sold a minority stake to Saudi Arabia’s Public Investment Fund. That $200m investment (for a stake of some 20%) was expected to lead to larger (and more international) deals by the highly-acquisitive Penske. Some gossip suggests that the Saudi deal may have impacted BandLab’s stewardship of Rolling Stone’s international editions. Whatever, the Saudi investment will certainly have deferred Jay Penske’s plans for an IPO anytime soon. State-sponsored killing tends to have that effect. The wildest possible scenario now is that Penske could merge his company into Conde Nast and help the Newhouse family put the sizzle back into its legendary magazine business. Instead of supporting a touted (alright, by us) merger with Hearst.
Books. The €29bn Vivendi SA has completed its €900m acquisition of Editis, the second-largest French-language publishing group from Grupo Planeta, of Spain. The French Competition Authority has approved the transaction. With a large portfolio of internationally-acclaimed authors, 4,000 new books published each year and a catalogue of more than 45,000 titles, Editis is active in the fields of fiction, children’s books, non-fiction, graphic and illustrated books, educational & reference books. the company employs 2,400 people. The Bookseller reported: The deal represents “a new brick in the construction of a major industrial group centered on media, content and communications,” Vivendi said. “It will enrich the group’s creative capacity for developing new editorial projects and types of content.” These include setting up franchises abroad on the Paddington model, and developing audio books, which are growing by 40% a year. The two companies “share a recognized know-how in intellectual property rights,” the statement added. The takeover sounds like history repeating itself, since the Vivendi group—under different ownership—controlled what became Editis before the foundations of the present group were laid in 2004. It is now made up of more than 50 publishing houses including Robert Laffont, Nathan, Bordas, Plon, Perrin, Pocket and Belfond. Leading authors include Marc Lévy, France’s bestselling novelist worldwide.
Magazines. National Enquirer publisher American Media Inc (AMI) has acquired TEN: Publishing’s Adventure Sports Network, a group of 14 action sports brands, including Bike, Powder and Surfer magazines as well as the Dew Tour event series. Terms of the deal have not been disclosed. The deal continues AMI boss David Pecker’s recent track record of diversifying (away from its dependance on scurrilous supermarket gossip weeklies) through the acquisition of media brands in trouble which last year included: US Weekly and Men’s Journal (from Wenner Media), and Bauer’s celebrity and teen magazines. The TEN magazines will augment AMI’s Active Lifestyle Group, which includes Muscle & Fitness, and Muscle & Fitness Hers. In 2016, AMI had revenues of $223m. TEN: Publishing’s parent company, The Enthusiast Network, sold a majority stake to Discovery Communications in 2017, rebranding the JV as the Motor Trend Group which plans to focus on its automotive magazines including Motor Trend, Automobile, and Hot Rod.
Exhibitions. The UK-based Mercator Media Ltd is acquiring the Marine & Coastal Civil Engineering Expo from the Prysm Group. M&CCE Expo is to co-locate with the Seawork event this year on 11-13 June in Southampton UK. Transaction terms not disclosed. The 30-year-old, privately-owned Mercator Media has a portfolio of long-established magazine-centric maritime brands including The Motorship, World Fishing, Boating Business, and Maritime Journal. The company is soundly profitable and believed to have revenues of some £6-7m. The Bristol, UK-based Prysm Group has a portfolio of some 30 B2B exhibitions including: The Business Show, Legalex, Elite Sports Performance and Farm Business Innovation.
Audio streaming. Spotify, the world’s most popular music streaming service, announced that it is to acquire Gimlet Media, the award-winning podcasting company. Gimlet was founded in 2014 and is based in Brooklyn, New York. Rumoured price is more than $200m. Spotify also acquired the podcasting app Anchor. Gimlet co-founders Alex Blumberg and Matt Lieber spoke to Peter Kafka of Recode Media just hours after the sale was officially announced. Lieber said they did consider that, given the success of its hit shows like StartUp and Reply All, Gimlet might be able to “navigate the stormy seas of media” and remain independent. But ultimately, they decided that was a risk, and Spotify had more to offer. “We looked at the path of joining a large platform with global distribution and, you know, multiple billion dollars of revenue and data and discovery and an amazing technology platform that was invested in audio,” Lieber said. “And for us, that felt like a better path where we could realize our ambitions and our goals. And also, make money back for our investors and provide a healthy return.” In 2017, Spotify’s revenue was some €4bn, up from €2.95bn in the previous year.
Magazines. Pocket Outdoor Media, best known for publishing VeloNews, has acquired Bicycle Retailer & Industry News from Emerald Expositions. As part of the transaction, Bicycle Retailer & Industry News will no longer be published by the National Bicycle Dealers Association. Transaction terms were not disclosed.
B2B information. DiscoverOrg has acquired Zoom Information, Inc to provide sales, marketing, and recruiting professionals access to comprehensive B2B data which combines DiscoverOrg’s research-verified buying insights with ZoomInfo’s coverage of business professionals. Transaction terms were not disclosed.
Financial. As part of its strategic refocusing around Lagardère Publishing and Lagardère Travel Retail, the Lagardère group has sold the Boursier. com website and its financial markets information and publishing activities to the Les Échos – Le Parisien group for a price of €3.5m. Les Échos was France’s first daily financial newspaper, edited in Paris since 1908 and once owned by the Financial Times, of London. It is now owned by luxury product group LVMH.
B2C digital. Pharmasimple, of France, has agreed to acquire Enova Santé, the publisher of the “1001 Pharmacies.com” marketplace, positioning it as the country’s leading online pharmacy. The €8m purchase price will be made in shares and convertible bonds.
B2B information. Indian digital marketing agency Dricki has acquired Etalktech. com, which claims to be the country’s fastest growing technology and social media blog for bloggers. Transaction terms not disclosed.
Magazines. Anthem Publishing, of the UK, has acquired the monthly Healthy Diet magazine from the DC Thomson-owned Aceville Publications. Anthem, which was founded 16 years ago by ex Future Plc publishers Jon Bickley and Simon Lewis, publishes a portfolio of specialist food magazines, including Vegan Food & Living, Simply Vegan, Gluten-Free Heaven and Baking Heaven. It also operates in the music, mindfulness and fitness sectors, and has twice been voted UK Independent Publishing Company of the Year.
B2B information. It is more than six months since the London-based Horizon Capital (formerly Lyceum) hired advisers to find a buyer for AgriBriefing. The increasingly international B2B specialist had been launched in 2010 as Briefing Media, by Neil Thackray. He had started out by selling UK recruitment advertising for Reed Business Information before becoming a CEO in B2B companies large and small, and an outspoken advocate of reinvention in traditional media. In 2010, he teamed with former marketing director Rory Brown (ex Metal Bulletin, EMAP and Incisive Media) and Rupert Levy (a finance director from Haymarket and UBM). It was a compelling mix of experience and ambition. Their new company Briefing Media started with errr Media Briefing which produced smart (but largely unprofitable) analysis of the digital media wars. It became a platform for profits from the British Media Awards and high-flying media-tech conferences including Digital Media Strategies (now in its eighth year and owned by Haymarket Media). In 2012, Kester private equity backed Briefing Media’s £10m acquisition of agriculture and medical publications from another of Thackray’s former employers, UBM. The medical magazine Pulse was divested in 2013 and the media industry activities were sold four years later as the company became a farming-food specialist. Its Farmers Guardian’s location in unfashionable, low-cost Preston (four hours from the London headquarters) had been one reason why the weekly had been neglected for so long by UBM – and also why it became a high-margin contributor to Thackray and Brown’s success. Their energetic strategy seemed to have five objectives:
- Grow digital revenues while maximising print
- Replace subscriptions and retail copy sales with a three-tier membership scheme
- Build strong exhibitions, conferences and awards events
- Acquire high-value data, especially ‘price reporting agencies’
- Go global
The energetic strategy delivered, as the 175-year-old Farmers Guardian pushed up revenue by 57% in four years. Operating profits jumped by 27% with members paying up to £138 annually for a package of offers including early access to classified ads, data services and insurance discounts. The success was consolidated by acquisition of the 40-year-old LAMMA agricultural machinery show, the launch of the CropTec exhibition for arable farming, and LAMMA Exchange machinery digital classifieds. Then came the rapid climb up the B2B value chain with well-targeted data-rich acquisitions. In 2014, they paid some £300k for the Agrimoney investment site which gave a foothold in the international agribusiness and commodities market, where it claimed 70,000 users in 170 countries. Next came the complementary £13m acquisition of Global Data Systems, the France-based owner of FeedInfo, the pricing platform for global animal feed. In 2017, it plunged into the US market with the £17m acquisition of Urner Barry, the 160-year-old provider of news and prices in the poultry, egg, meat, and seafood segments of the food industry. That deal alone was said to have added more than 3,000 clients. Last year, Briefing Media rebranded as AgriBriefing and CEO Neil Thackray became non-executive and handed over to co-founder Rory Brownin what has proved to be a smooth transition. The changes seemed to signal the maturing of the company which, just three years earlier, had revenues of £5.8m (100% from the UK). By 2018, its estimated £30m revenue came 50% from outside the UK, and included at least 50% from subscriptions. EBITDA profit margins are estimated to be some 30%, and the total audience is claimed to comprise some 500k agribusiness professionals in 200 countries. In 2015, Kester Capital had sold AgriBriefing on to Horizon/Lyceum for £37m. Having pushed up profits and spent some £30m on acquisitions, its valuation may now be more than £150m as it seeks to capitalise on the fragmentation of information services in global farming-food. Far from merely giving their latest private equity partner another good payday, the AgriBriefing founders may now be captivated by a perfect storm of UK-based M&A in their sector: Reed Business Information is believed to be selling Farmers Weekly, the flagship print-digital brand which has been successively bested by the upstart Farmers Guardian; Informa is selling its £30m-revenue Agribusiness Intelligence which operates in the US, Canada, Brazil, UK, Belgium, Germany, Hong Kong and Australia; and Inflexion private equity is ready to sell Kynetec, the £40m-revenue, 16-year-old farming market research specialist which had been divested by Frankfurt-based GfK in 2016. It has become a world leader following acquisition of an Ipsos subsidiary in North America and Market Probe in Continental Europe. By acquiring, say, Agribusiness Intelligence and Kynetec, AgriBriefing would move into the heart of global farming-food prices, research and consulting. The appetising combination could turn the one-time B2B startup into a truly international information specialist employing some 500 people, with £100m of revenue, perhaps £40m EBITDA and a valuation of more than £400m. AgriBriefing can then contemplate some yet larger US and Asian transactions – and an IPO. Wow.
B2B information. Magazine conglomerates are part of the past and not just because print audiences have been eclipsed by digital. The London-based predecessors of TI Media (IPC Media and Time Inc UK) built profitability through the scale economies of printing, distribution and sales. As the company’s new private equity owners shuffle through its diverse, wobbly portfolio trying to decide what to sell, what to keep and what to invest in, they might find some light relief in the quaint story of one of its former magazines, a B2B bi-monthly called International Boat Industry. IBI, as it is known, was published by Reed International until 1983 when it was acquired by editor-in-chief Nick Hopkinson. Seven years later, he sold it on profitably to United Newspapers (UBM) and continued as editor-publisher. By 1995, Hopkinson was one of five directors who bought out all of UBM’s Link House leisure magazines (including IBI). They were backed by Cinven private equity which, separately, had also acquired IPC Media (from Reed), together with the clutch of consumer boating magazines which had been Hopkinson’s office neighbours a decade before. In 1998, Time Inc expensively acquired both the IPC and Link House magazines from Cinven, and Hopkinson found himself back alongside Yachting World and Motorboat & Yachting magazines. That’s where he stayed for another 19 years until 2017 when he and three colleagues (now trading as Boating Communications Ltd) acquired IBI for a third time, paying a nominal sum for the assets of the magazine and web site before most of their readers and advertisers had even heard about the parent company’s decision to close them. The latest MBO seems a fitting way for Hopkinson to mark his 50 unbroken years on what still claims to be the only B2B magazine-digital service for the global marine leisure industry. He had helped to launch IBI back in 1968 after dropping out of his first year at university. All these years later, he has just filed annual accounts showing a small profit from £1m revenue (70% is print) that is actually up on three years previously, when Time Inc were preparing to shut it. As someone who has devoted his entire professional life to a single magazine-centric brand, alternately as a sole trader and a corporate executive, the affable Hopkinson is confident about the future of IBI, especially digitally. Of course. His optimism is echoed by industry predictions that the $360bn global leisure boat market will grow at 4.3% annually for the next seven years. Beyond such forecasts, it is surprisingly difficult it is to find meaningful data on leisure boat construction, ownership, registration, technology, and location. Even allowing for secretive super yacht owners, this seems like one high-value B2B information service just waiting to be created. Perhaps it points the way to how International Boat Industry may yet become the kind of data-owning brand that those large media companies would always have wanted to retain. Even after 50 years, Nick Hopkinson still has something to prove.
Exhibitions. The TMA, the 103-year-old US tobacco industry trade association, has agreed to acquire the exhibition and publishing assets of privately-owned tobacco market specialist SpecComm International Inc, of North Carolina. The assets include: the international exhibition and conference, TabExpo; the nicotine and tobacco conference, GTNF; and the magazines Tobacco Reporter, Vapor Voice and Tobacco Farm Quarterly. The terms of the transaction were not disclosed. TabExpo is the tobacco industry’s leading trade show having been created in Europe by Dayton Matlick, chairman of SpecComm. The first event in Vienna in 1994 was followed by Geneva (1998), Barcelona (2003), Paris (2007), Prague (2011) and London (2015). The London show attracted almost 4,000 visitors and some 200 exhibitors from 93 countries. The next TabExpo is scheduled for Nov. 12-14, 2019, at the RAI exhibition hall in Amsterdam. TMA, of New Jersey, is a non-profit, membership organization and is creating a new division, The GTNF Trust, to operate the GTNF Conference, Tobacco Reporter Magazine and Vapor Voice Magazine.
News. An anonymous offshore investor has taken a 20% stake in Lebedev Holdings, the privately-owned parent company of the London Evening Standard, the digital-only news brand The Independent, and London Live TV. The company refuses to reveal the identity of its new financial backer. Majority owner Evgeny Lebedev (former owner DMGT remains a minority shareholder) sold the stake to a Cayman Islands-registered company in December, according to official filings. It suggests that the investor has put almost £14m into Lebedev Holdings which made an operating loss of £18.3m in 2016-17, compared with a profit of £3.9 the previous year. It is widely believed that the mysterious investor is from Saudi Arabia because it is two years since Lebedev sold one-third of The Independent’s own subsidiary to a Cayman company controlled by a Saudi director of a state-controlled bank. According to the Financial Times, the recent anonymous investment in Lebedev Holdings was made by a Cayman Islands company founded by the same agent used during the Saudi investment in The Independent. The Guardian reported that The Independent last week launched a series of spin-off foreign-language websites funded, written and edited by a Saudi publishing company, reportedly with close ties to the Saudi royal family. The Evening Standard, whose editor-in-chief is the UK’s former Finance Minister George Osborne, distributes some 900k copies each weekday in London. In 2017, the newspaper incurred an operating loss of £9.9m (2016 profit: £2.2m) on revenues of £63.9m (£71.2m), due principally (no surprise) to reduced advertising yields. It is stepping up its digital activity and also events. But the advertising revenue pressures on the free newspaper underline the need for London’s only evening newspaper to re-think its commercial strategy. How about cross-media links with Global, London’s (and the UK’s) largest radio group which is also now one of the country’s major outdoor advertising groups? A radio-outdoor deal might also help Lebedev to turn-round the seemingly hopeless London Live TV which made 2017 operating losses of £3m on revenues of just £4m. The 2.5m gross monthly audience shows that it needs a complete revamp, perhaps as part of a wider media operation – if it is to survive. But, then, pervasive loss-making is what seems to define this curious media group. Evgeny Lebedev’s decision to sell a 20% stake to an unidentified offshore buyer (which comes at some risk to “sensitive” advertisers) implies that “safer” strategies have already been explored without success. What next?
News. The family-owned IT-broadband group Schurz Communications is selling to GateHouse Media 10 daily newspapers, which include the highly attractive college towns of South Bend, Indiana (The South Bend Tribune) and Bloomington, Indiana (Herald-Times), for a price of $30m. The group has average daily circulation of 105k, Sunday circulation of 94k, 4m website uniques, and 300,000 social media followers. Additionally, it has nine weekly and fourteen other community publications with aggregate weekly circulation of 250k, spanning Indiana, South Dakota, Maryland, Michigan, and Pennsylvania. The acquisitive GateHouse Media’s New Media Investment has 145 daily newspapers, 325 community publications and more than 555 local websites that reach more than 23 million people each week in 37 US states.
Broadcast. ZDF Enterprises, the commercial arm of German public broadcaster ZDF, has acquired shares in Nadcon Film, gaining a majority stake in the company. Nadcon Film was founded in 2012 by Peter Nadermann and Constantin Film, and specialises in co-producing film and television projects, mainly with international partners. The terms of the transaction were not disclosed.
B2C exhibitions. The UK-based magazines group Immediate Media has plunged deeper into live events with the £10m acquisition of Upper Street Events. It is the organiser of consumer exhibitions including The Cycle Show, the Knitting and Stitching shows, Festival of Quilts, Country Living Fairs, Adventure Travel Show and The London Cruise Show. The events are said to be attended by 250,000 people and supported by 3,700 exhibitors. Upper Street, which has been owned by Living Bridge private equity since 2014, was originally established 32 years ago by the London venue, the Business Design Centre, from which it was de-merged in 2009. In 2017, the organiser made £1m EBITDA on revenues of £10m. But its financial performance of recent years has been erratic, to say the least. By integrating Upper Street into existing operations, Immediate will more than double the £1m profits of the exhibition company – even before creating new events. The publisher (which was largely built from the portfolio of the former BBC Magazines) claims to reach over 22m UK consumers monthly across a range of special interest sectors, including Food, Cycling, Parenting, Weddings and Craft. In the craft sector alone, Immediate reaches over 4m people every month across print, digital and broadcast media. It is 12 months since the Munich-based, privately-owned Hubert Burda Media acquired Immediate from Exponent private equity for £270m (5-6 x EBITDA) during a year when some 50% of all UK magazine publishing changed hands. Immediate is a real star in UK media, steadily growing profits from print as well as digital, events, e-commerce and even broadcast. This week’s exhibitions deal further demonstrates the parent company’s commitment to expanding in the UK market. Last year, it paid an estimated £30m to acquire the £25m-revenue BBC Good Food, which has the biggest cross-media reach of any UK magazine brand, with 22m monthly uniques, 1.3m magazine readers, and 250,000 exhibition visitors. But Immediate’s 95-year-old Radio Times (the world’s first broadcast listings magazine) may still account for almost 50% of the company’s profit. It is the UK’s third most popular paid-for magazine – and far the most profitable. But it’s no accident that the ambitious, versatile Immediate Media is itself the UK’s most profitable magazine publisher even though at least two of its rivals have more revenue. It will now be interesting to see whether it can make a substantial business from the kind of live events that almost every consumer media group talks about. There was not a long line of rival bidders for Upper Street Events: consumer exhibitions are no match for their highly-prized B2B cousins. But few would bet against Immediate proving (again) how to capitalise on famous brands that were once just magazines.
Classifieds. Schibsted has paid €100m to acquire the 10% of Spanish classifieds group SCM that it did not already own. The deal comes just ahead of the Norwegian company’s demerger of its online classifieds outside Scandinavia. SCM, whose brands include Milanuncios, Coches, InfoJobs, Fotocasa and Habitaclia, has a leading position in the Spanish market and grew its revenue last year by 19% with its €46m EBITDA representing a 64% increase. Schibsted’s decision to spin-off its international digital operations will create MPI, a Nasdaq-listed company with 51% of its revenues in France, 27% in Spain and 22% in 14 other countries including Italy, Ireland, Hungary and Colombia. Almost 70% of MPI revenues will come from classified verticals in cars, real estate and jobs. Originally a newspaper group, the 180-year-old Schibsted has been at the forefront of the global expansion of online classifieds. More than 10 years ago, Rupert Murdoch described it as “the best media company in the world”. Schibsted (which is controlled by a protective trust) will retain a 60% share of MPI after its listing in March this year but makes the point that it wants none of the safeguards and special voting rights it enjoys at the Scandinavian business: MPI will soon be free to compete, do deals and even be sold. Most observers expect the IPO of MPI (with former Schibsted boss Rolv Erik Ryssdal as CEO), therefore, to be the focus of consolidation in online classifieds whose principal global players include Naspers, Ebay, and Axel Springer. Which company will want to merge with the $650m-revenue MPI? Perhaps the most tempting scenario involves Springer, arguably the world’s best news-based digital group. The Berlin-based company (increasingly international and 70% digital) must once have flirted with the idea of a Schibsted like de-merger when it had a classifieds joint venture with US investor General Atlantic during 2012-16. A combined MPI-Springer classifieds group could become an unrivalled global leader. But, while Springer’s fast-growing classifieds are concentrated heavily in Germany, UK, Belgium, France and Israel (and, therefore, have relatively little overlap with MPI) and account for “only” 38% of group revenues, they do account for more than 60% of its EBITDA – and most of the growth of the €6bn company. But some kind of deal might still be a tempting prospect, given MPI’s forthcoming listing in the US, where Springer (owner of the 300m-audience, now-profitable Business Insider) is a significant digital player. If not, perhaps Ebay or Naspers will step in. Let’s watch.
B2B information. Pageant Media, the UK-based, privately-owned company serving the financial markets with news, information, research and events, has expanded further in the US with the acquisition of the Florida-based, The Pension Bridge Inc., a provider of “educational conferences” to institutional Investors, notably The Pension Bridge Annual and The Private Equity Exclusive. They are neatly elite B2B events: for the 2019 three-day Annual conference in San Francisco, for example, attendance is capped to ensure only 100 “manager firms” and 125 “pension funds/ consultants”. It is believed that this deal may include payment by some equity in Pageant, although the transaction value has not been disclosed. But, along with the 2017 appointment as chair of Bain private equity’s Graham Elton, the latest acquisition looks like a further strategic step towards some kind of fundraising, sale or even IPO. The 21-year-old Pageant (56% owned by its CEO and founder Charlie Kerr) has revenue of some £20m and EBITDA of perhaps £2m. It is thought this latest acquisitions may add some 5% to annual revenues. The subscriptions-dependant digital publisher claims to publish 1,000 articles a month for 2,500 paying member companies in 100 countries, and operates over 200 events per year, including conferences and round tables. It has an unmistakably smart, live-wire reputation among customers, employs more than 200 people and has offices in the UK, US, Hong Kong and Germany. The publicity-shy company has been having discreet discussions about future funding deals in London but the betting is that it will seek to make further acquisitions in order to increase its options – and valuation. Getting to something like £40m revenue and £8m EBITDA by 2021 would do it. Unless Reuters, Dow Jones, Bloomberg or the Financial Times come calling in the meantime.
B2B information. Dynata, the US research company which resulted from the 2017 merger of Research Now and SSI and which claims to be one of the largest online panel data companies, reaching 60m people globally, is acquiring data creation company Reimagine Holdings Group. Dynata serves nearly 6,000 market research agencies, media and advertising agencies, consulting and investment firms, and healthcare customers in North America, South America, Europe, and the Asia-Pacific. Transaction terms not disclosed.
Broadcast-streaming. Viacom is buying the ads-supported free programming Pluto. Launched in 2013, Pluto offers more than 100 channels with programming from 130 partners. The company, which is said to have a $200m run rate, claims an audience of 12m monthly users, two-thirds of whom watch via connected TVs. Viacom is paying $340m in cash and the deal is expected to close during the first quarter of this year.
Classifieds. Swisscom Directories Ltd, the leading digital agency for Swiss SMEs and operator of local.ch and search.ch, has acquired Websheep GmbH, a Swiss company that operates comparison web sites for driving instructors, dentists, lawyers, financial advisors, and hairdressers. Transaction terms not disclosed.
Exhibitions. Reed Exhibitions is buying the high-rated, UK-based Mack Brooks for a price believed to be some £200m. The privately-owned Brooks was established in 1965 and holds more than 30 business-to-business events in 14 countries, across airport technology, chemicals, packaging, and fasteners. The company, whose major brands include Euro Blech, InPrint, RailTex, FastenerFair, InterAirport and ChemSpec, has long been one of the UK’s most admired independent exhibition organisers. One flagship is the Fastener Fair, taking place at Stuttgart in March, which will have a total of 22,000 net sq m of exhibition space occupied by 900 companies from 40 countries. It is said to be almost 10% larger than the previous event in 2017. Owner Stephen Brooks has spent half a lifetime fending off bids from larger rivals. In 2016-17, Mack Brooks made operating profit of £16.7m on revenue of £38.5m (a 43% margin). It’s a solidly international business: some 92% of revenues come from outside the UK, with profitable operations in the US, China, Singapore, India, France, and Germany. Even its complementary publishing is soundly profitable. Mack Brooks is a gem of a business and there are several disappointed exhibitions bosses who had thought they were on some kind of a long-term promise whenever the owner decided to sell. But he could only sell to one of them. Reed actually pipped Inflexion private equity (former 47% owner of UK-based CloserStill) to the deal. The big news is certainly that the RELX parent decided to invest some £200m in an acquisition on behalf of Reed Exhibitions which – while very strong and growing – is strategically non-core in a listed global company focused on information and data-tech. No matter. It’s petty cash for the £32bn RELX and will, anyway, make what is now the world’s second largest exhibitions group yet more attractive when/if the sale (which RELX executives have discussed) finally materialises. But not yet. With its network of 30 international offices, Reed will quickly boost profits by absorbing the Brooks local operations. The price of the deal is eye-catching. The Mack Brooks strong portfolio of non-annual shows means that its operating profit has swung alternately in the last four years between £2m and £20m. Its complex corporate structure, international subsidiaries and joint ventures make tricky reading but, at one level, the profits of those four years have averaged £13m. So, the estimated £200m purchase price could be 15-16 x the average EBITDA. While stated acquisition prices can be distorted by debt and liabilities, the Mack Brooks deal seems unlikely to be quite as rich as the reported 20-22x multiple paid for CloserStill by Providence private equity. That’s some sort of consolation for Inflexion which had so wanted to replace its CloserStill investment with Mack Brooks. But just imagine what any of these prices – and the appetite of private equity – could mean for an eventual sale of Reed Exhibitions, with its £300m operating profit from 500 events in 30 countries. Do the maths.
News. Digital First Media (controlled by New York-based Alden Global Capital) is set to buy Gannett (publisher of USA Today and dozens of other newspapers including including The Arizona Republic, the Milwaukee Journal Sentinel, and The Cincinnati Enquirer) after making a hostile $1.4bn bid for the company at a 23% premium to its then share price. If successful, this would be the largest acquisition so far for Digital First Media (publisher of some 200 newspapers including The Denver Post and The Orange County Register). Bloomberg says Alden asserts that “the future of newspapers lies in consolidation and the cost cuts that it enables” and that “the strategy of buying and cutting is exactly the one that Gannett pursued as it grew into the biggest newspaper owner in the country”. In its offer letter, revealing that it had bought a 7.5% stake in Gannett, Digital First accused the management of poor digital deal-making. Gannett was once the most voracious acquirer of US local papers; now “the hunter has become the hunted.” It all threatens to disrupt the auction for Gizmodo Media, where Gannett has been one of the few serious bidders. The Univision-owned Gizmodo has the eponymous tech website as well as the digitals Jezebel (gender, culture and politics) and Deadspin (sport). Gizmodo is thought most likely now to be bought by Bryan Goldberg, owner of Elite Daily, Bustle – and Gawker (once part of Gawker Media alongside Gizmodo). Insiders sniped that Univision had been hoping to get a good price from Gannett rather than a typically price-squeezed deal from Goldberg. Across the pond, insiders are asking what will happen to Gannett’s highly-regarded UK subsidiary, Newsquest Media? The £130m-revenue/ £21m-profit company publishes the Glasgow Herald and the UK’s oldest newspaper, the Berrow’s Journal, and has long been one of the country’s most successful regional publishers. Its 200 local news brands and magazines claim 30m online users and 6m print readers, and employ 1,800 people. Will Digital First Media want to be in the UK or will the burgeoning Reach Plc (formerly Trinity Mirror), the UK’s largest national and regional news group, want – and be permitted – to acquire all or some of it?
Magazines. London-based tech consulting firm Panoply Holdings, which IPOd in 2018, has acquired the quarterly technology magazine and events brand D/SRUPTION which is said to “target at senior management involved in digital transformation”. It’s a slightly odd sounding transaction that involves an initial consideration of £50k in shares and an earn-out capped at – £3.6m. Neither D/SRUPTION (based in Leeds) which seems not to have been part of any registered UK company, nor Panoply have reported the transaction on their respective websites. The driving force behind Panoply is serial techie Neal Gandhi and the chair is Mark Smith, former finance director of UK-based marketing services companies Chime and Bell Pottinger.
B2B information. Habitat Magazine, a special-interest consumer and b2b publication on co-op/condo living and management, has purchased Vendome Real Estate Media. Both companies are New York-based and will now be known as The Habitat Group. Deal terms were not disclosed. The deal includes real estate legal newsletters, books and video. Habitat was founded in 1982 by Carol J. Ott and NY Apartment Law Insider, the oldest Vendome newsletter, was founded in 1979.
B2B information. New York-based Institutional Shareholder Services Inc. (ISS), “a provider of end-to-end responsible investment and governance solutions” to the global financial community, is acquiring Strategic Insight (formerly known as Asset International), of Maryland, a provider of data and research to investment firms for an undisclosed price. Both companies are owned by Genstar Capital private equity.
Special interest media. In a deal which underlines both the increasing value of specialist-enthusiast content and the fusion of online and broadcast media, the $13bn Discovery Inc has acquired control of the cycling digital Play Sports Group (PSG). The UK-based company produces over 1,000 online videos annually on YouTube. It gets 45m monthly video views, 3.1m subscribers and 5.7m social followers for eight online channels including Global Cycling Network (claimed to be the world’s largest and fastest-growing cycling channel), Global Mountain Bike Network, and the Global Triathlon Network. PSG says its “videos bring fans compelling daily content including expert tutorials, techniques, training, unparalleled behind the scenes event coverage, humour and entertainment. Presented by ex pro riders, GCN offers a uniquely qualified insight into the world of cycling, fuelling its viewers’ passion and knowledge”. YouTube’s European boss describes it as “a shining example of how to grow a passionate audience of fans using YouTube’s platform.” The fast-growing company employs some 140 people, including specialist marketing agency Shift Active Media, whose clients include many of the largest cycling brands. PSG has revenues of £15m and is thought to have been profitable in 2018 after making an EBITDA loss of £71k for the previous year. Revenues have multiplied three times in the past two years and are 80% from outside the UK. In 2018, PSG launched five new international channels, a consumer retail division and fan club, and broadcast live racing on its YouTube channels and via Facebook Watch. This month’s deal gives Discovery a 71% shareholding, following its initial acquisition of a 20% in 2017. The terms have not been disclosed but Discovery is believed to have paid some £5-6m for its initial 20% and an estimated £40-50m in this latest transaction which includes future options to buy the 29% still held by PSG founder Simon Wear. He will remain CEO of what is now a subsidiary of Discovery, and PSG looks a great fit. Discovery’s Eurosport claims to be Europe’s leading sport ‘destination’ and the primary TV rights holder for key cycling events, establishing an unrivalled portfolio which includes all three Grand Tours, more than 35 UCI World Tour races, including all five of the iconic Monuments, and the UCI World Championships. In 2019, cycling fans will be able to see over 200 days and 2,500 hours of live cycling on Eurosport. Its online site has an average of 42m monthly uniques. Discovery claims now to be the leader of an estimated $50bn global market. Life-long cycling enthusiast Wear launched PSG in 2012, two years after he had ended an 18-year career at magazines group Future Plc to start Shift Active Media. He was Chief Operating Officer of Future UK having also led the company’s dramatic growth in international licensing revenues. He secured highly-profitable deals with 56 partners in 39 countries to produce a peak global print audience of 25m for niche magazines as diverse as T3, Guitarist, PC Gamer, and Cycling Plus. Wear’s passion for specialist media seemed a perfect match for the magazine company founded 34 years ago by TED’s Chris Anderson in the picture-book city of Bath in England’s South West. Anderson, whose revered TedTalks became “Ideas Worth Spreading” in his next life, originally sloganised his hometown magazine business as “Media With Passion”. Future IPOd in the tech-investor boom of 1999 and quickly raced to a market cap of £1bn, followed abruptly by the first of a series of near-death sell-offs by fickle investors. There was often a lot more passion than profit. Future’s collective enthusiasm somehow carried it through successive crises in the two decades before it finally escaped from a UK-typical dependency on newsstand sales and print advertising. But the home-spun, try-anything publisher was a brilliant business school for Simon Wear, whose entrepreneurial instincts were ultimately spiked by 21st century magazine cutbacks by UK supermarkets and advertisers. By then, he had fallen in love with online video and “the limitless distribution and total meritocracy (the best content wins) of YouTube. I just had to work out how to do it.” Back in 2012, some observers assumed that Wear’s Bath-based launch of the Global Cycling Network (GCN) was actually coming down the road from Future whose cycling-magazine web sites (since divested to raise rehab cash) were then attracting over 5m monthly uniques. In 2012, Flashes & Flames said that GCN was an indication of how much “magazine publishers like Future will have to change in order to compete. Suddenly, the world’s leading cycling publisher finds itself on the outside lane in a key growth sector.” Six years later, the Play Sports Group is powerful fan and community -based media. The realisation that the future of so much media lies in “narrow-but-deep” content and relationships is nothing new. Indeed, for all the damaging loss of print advertising, the relatively steady audiences enjoyed by many specialist magazine brands underline the global promise of media produced by enthusiasts for enthusiasts. But they will have to work at it. Meanwhile, the mighty Discovery seeks to become “the premier real life entertainment company” with multi-platform assets around distinct programming niches, from cooking, home decorating and motoring to golf, cycling and other sports. The PSG acquisition follows announcement of Discovery’s Golf TV streaming service which launches this year with the PGA Tour and Tiger Woods. The whole strategy emphasises the unmistakeable TV-led threat of “media fusion” for magazine-centric companies: broadcast-streaming, text and interactive digital combining to offer the ultimate in consumer engagement and e-commerce. But specialist consumer publishers (and perhaps some B2B groups too) can also build multi-platform communities of fans and enthusiasts beyond the reach of the data monsters. Former Top Gear TV presenter Jeremy Clarkson’s DriveTribe online communities enjoyed a luxuriously over-funded launch (£12m burned in two years), and may now be close to securing the additional investment necessary to monetise a fast-growing global audience. But, with a small fraction of the investment and none of the fanfare, the energetic Simon Wear has shown publishers everywhere how to do it.
Exhibitions. CloserStill Media, the 10-year-old London-based organiser of exhibitions principally in the healthcare, learning technologies and medical sectors, has been acquired by Providence Equity Partners for £340m. The price, based on an estimated 2018 operating profit of some £15m, is a multiplier of perhaps 22 (and more than 8 x revenue), a new high in a season of soaring valuations for exhibitions. Equally striking is that it is just six years since CloserStill was valued at £25m by Phoenix Private Equity which was able to flip its investment to Inflexion in 2015 with the company then valued at £125m even though operating profit that year was just £1.2m. Revenue has multiplied almost five times in the past four years as CloserStill has built its flagship events including the London Vet Show, Cloud Expo Asia, Data Centre World, The Pharmacy Show, Learning Technologies, and The Dentistry Show. Since the Inflexion investment, the company has made eight acquisitions – five in 2017 and three in 2018 – but CloserStill founder and chair Phil Soar has stressed that the majority of the company’s growth has been organic, through the geo-cloning of successful shows in Asia, Germany and the US, with the launch of events such as Cloud Asia, Learning Technologies Germany and New York Vet. That’s how the company sustains its 30%+ EBITDA margins. Soar is an industry veteran whose successful back story includes managing the legendary Blenheim exhibitions and also magazine and part-work publishing companies. But he’s also managed a UK football club and has written books about sport. Soar and his management team are said to be staying in place at CloserStill and have promised shares to all their staff. The founder’s carousel-ride around private equity investors looks like a masterpiece of investment management. But it underlines the undimmed enthusiasm for exhibitions, still the only area of traditional media not disrupted by digital. While holdings of investments by private equity firms (in the US, for example) are said to be stretching beyond a traditional three years to more like 5 years, their involvement in exhibitions is helping to grow prices as the companies constantly seek to replenish portfolios. CloserStill buyer Providence, for example, previously owned Clarion Events (sold to Blackstone in 2017 ) and George Little Management (sold to Emerald in 2011). That’s why they’ve all been swarming round UK-based Mack Brooks where Reed Exhibitions is tipped to pay £250m for a great internationally-focused company but a tightly-managed one with 43% margins where the last profits were £16.7m. But nobody has missed the point that Reed Exhibitions itself – until last year, the long-time world exhibitions leader but which has consistently had lower profit margins than most of its peers – might seemingly command a sale price of up to £6bn (20 x 2018 operating profit). For parent company RELX, which is investing big in data-tech and is also now bracing itself for damaging attack on its heady profits from across academia, it’s surely only a matter of time before they cash in. Get ready.
Broadcast-streaming. The UK’s state-owned Channel 4 TV network has bought Bauer Media’s 50% share in The Box Plus Network, giving it full control of the TV music and entertainment business. The network operates TV channels such as 4Music, The Box, Box Upfront, Box Hits, Kiss, Magic and Kerrang and serves to bolster Channel 4’s portfolio. Deal terms were not disclosed.
B2B information. Ve Global, a British-founded data company with 380 employees, has acquired the Swedish e-commerce analytics platform Divvit in a deal that involves both cash and Ve’s stock. Ve has also “made a financial commitment” of some £500k to integrate Divvit’s solutions into its products, the company stated in a press release.
B2C digital. RTL Group is acquiring control of the UK-based video technology company Yospace. The transaction is expected to close in February. Yospace enables Server-Side Dynamic Ad Insertion (SSDAI) which allows the replacement of existing commercials from a broadcast stream with more targeted, personalised advertising. Yospace customers include BT Sport, TV4, ITV in the UK and Seven West Media, in Australia.
B2B information. The $2bn-revenue Autodesk Inc, of California, has agreed to acquire BuildingConnected for $275m net of cash acquired. This acquisition will add bid management, risk analysis and other pre-construction solutions to Autodesk’s construction portfolio. With BuildingConnected, the company gets a network of 700,000 construction-related professionals that help real estate companies and construction firms find qualified workers for their projects and manage the bidding process. Much like PlanGrid (acquired last year by Autodesk for $875m), which takes huge paper plan books and digitizes them for construction sites, BuildingConnected does that with the planning and management part of the construction process for which companies once used complex Excel spreadsheets.
B2B information. Lovell Minnick Partners, a US private equity firm specializing in financial business services companies, has acquired ATTOM Data Solutions, a leading provider of national real estate data and analytics from Renovo Capital and Rosewood Private Investments. Financial terms were not disclosed.
B2C digital. Dotdash, an operating business of IAC, has acquired Byrdie, a digital beauty brand, and MyDomaine, a women’s lifestyle property, from Clique Brands. Terms of the deal were not disclosed. Launched in 2013, Byrdie will become Dotdash’s platform brand for its expansion into the beauty space.
B2B information. Private equity-owned Adweek, of the US, has acquired CMO Moves LLC (doing business as ‘Marketer Moves’). Marketer Moves’ founder Nadine Dietz will join Adweek as editor, CMO Moves & Innovators. Deal terms were not disclosed. The 40-year-old Adweek has consistently been no.2 in the media-marketing-advertising news market to Crain Communications’ Advertising Age.
It’s that time of the year. Inevitably, this is a blend of deals that will (almost) definitely happen and those that might or should. See you in 2019.
Informa, now the world’s largest exhibitions group after acquiring UBM in 2018, divests its STM and B2B information companies
UK B2B Centaur Media MBO of its Marketing portfolio (Marketing Week, eConsultancy, Festival of Marketing, and OysterCatchers) after the planned sale of The Lawyer, Money Marketing and other ‘non core’ exhibitions and information services
UK-based but increasingly international information and events group AgriBriefing acquires the agrifood information of Reed Business Information and/or Informa
IPOs of acquisitive UK companies: AgriBriefing, Mark Allen Group , and Metropolis Group
Daily Mail Group sells its remaining 49% shareholding in Euromoney, the £1.2bn company it founded in 1969
Michael Bloomberg decides to run for US President and sells his eponymous data-tech business to Hearst which became 100% owner of the Fitch Group in 2018
Mail Online and BuzzFeed introduce paywalls in a bid to achieve long-promised profitability
Jeff Bezos (Washington Post) acquires UK’s privately-owned Daily Telegraph
News Corp launches worldwide news streaming service
News Corp acquires Australian Financial Review from Sydney-based Nine Entertainment Co which recently acquired the daily as part of Fairfax Media
New York Times launches ‘pick-and-mix’ digital content subscriptions, as a sequel to its success in building subscriptions for individual ‘strands’ including the Daily Crossword (350k subs) and Cooking (120k)
The Blackstone-owned Clarion Events acquires the largest US-owned group Emerald Expositions
RELX sells the £1bn-revenue Reed Exhibitions, until this year the world leader
Daily Mail Group acquires Britain’s £450m ITE Group
Hearst and Conde Nast (long-time family-owned rivals but collaborators in shared circulation and production services) agree to merge their worldwide magazines groups
News Corp Australia ‘merges’ with SevenWest (Channel Seven, Pacific Magazines) to create a multi-media rival to Nine Entertainment Co (which acquired Fairfax Media)
English Premier League announces a plan for direct-to-consumer streaming of its top-rated football
Daily Mail TV extends its daily programme from the US to the UK and Australia
Axel Springer’s newly-profitable Business Insider launches global ‘business TV’ streaming service
B2B information. The UK-based TES Global teachers information business (formerly the Times Educational Supplement) has been sold by TPG to Providence Equity Partners for a price believed to be some £250-300m. With 11.6m registered online users, TES connects teachers and schools, with around 500k teachers clicking to apply for jobs last year. The believed reduction in price from the £400m paid by TPG in 2013 reflects the decision to de-merge the Times Higher Education Supplement (THS) and its World University Rankings – but also the flatlining of TES Global which made 2017 EBITDA of £33.6m on £75.5m revenue. This is the fourth time TES has changed hands in the 13 years since it was sold by News Corp to Exponent private equity for £235m. Exponent (something of a media specialist in the UK market) flipped it two years later to Charterhouse for a rumoured £250m, but not before increasing profits by 50%. But that was the high-point for the recruitment classifieds which had long buoyed TES. Six long years later, Charterhouse sold a much-more-digital and global TES for £400m to TPG, which is thought unlikely to to recoup what it had paid, even after selling THS early in 2019 for an expected £100m. The Times Education Supplement was launched in 1910 as a free insertion in the Times newspaper. It became a standalone weekly in 1914. TES’s growing library of CPD content for teachers is claimed to be the largest in the English-speaking world.
B2B information. Planet, the US aerospace and data analytics company that operates the world’s largest commercial fleet of satellites, collecting daily, high resolution imagery of everywhere on earth, is acquiring Boundless Spatial, Inc., a St. Louis-based geospatial software solutions company. The deal expands Planet’s commercial business with the US government and commercial agriculture clients. Transaction terms not disclosed.
Magazines. London-based Immediate Media has won the lucrative contract to publish Disney children’s magazines which, it is believed, will add some £12m (5%) to its revenues in 2019. The UK contract was formerly held by the £50m-revenue UK subsidiary of the Danish-owned Egmont group which first published Disney magazines in Scandinavia all of 70 years ago. The coup highlights the continuing growth of Immediate which is the UK’s most profitable magazine publisher and the market leader in TV listings, children & parenting, and food – and perhaps also in other sectors including crafts and cycling. It is almost 12 months since Hubert Burda Media acquired Immediate from Exponent for £270m (5-6 x EBITDA) during a year when 50% of all UK magazine publishing has changed hands. Burda’s price for Immediate was more than double the £121m that the private equity firm had paid the BBC seven years before. That’s not how it’s meant to be. But Immediate is the magazine publisher that grows profits, increases margins and circulations, and launches new monthlies. Three months ago, it paid an estimated £30m to acquire the £25m-revenue BBC Good Food, which has the biggest cross-media reach of any UK magazine brand, with 22m monthly uniques, 1.3m magazine readers, and 250,000 exhibition visitors. But there is something you should know. Immediate’s 95-year-old Radio Times (the world’s first broadcast listings magazine) may account for some 50% of the company’s profit and is much more resilient than you would ever guess. For years, it accounted for almost 100% of the profits of the former BBC Magazines. Even now, when printed listings have no right to exist, Radio Times is the UK’s third most popular paid-for magazine – and the most profitable. Its average weekly sales in the first half of 2018 were 577k, a relatively modest 24% decline in the past four years. And profits have been sustained by a cover price that has increased from £1.80 to £2.80 in that time. Even in a UK magazine market still so dependant on newsstand sales, a full 45% of the Radio Times circulation is from posted subscriptions (another pattern right across the Immediate business which has a total of 1.1m subs). But, even that is only part of the surprising story. This month’s Christmas “double” edition of the indestructible Radio Times is expected to sell almost 2m copies at the “special” price of £4.90. It’s a decades-long tradition. So, for all the growth in digital (and Radio Times is no slouch there either), one of Britain’s best-loved magazines is the ultimate cash cow that has funded Immediate’s reinvention – and produced the UK industry’s best profit margins. The truth, of course, is that Radio Times is a high-quality magazine for an increasingly attractive older demographic and is much more than listings. That’s why it has been able to maintain a large audience and develop successful e-commerce in travel, books, gardening and financial services. The profits have funded investments including, for example, in the TV channels The Sewing Quarter and JewelleryMaker whose revenues last year increased by 28%. For a company that continues to deliver strong year-by-year results and has just emerged from private equity ownership, Immediate has a surprisingly settled long-term focus. With eyes on the future, it has recruited senior executives from Amazon, Sainsbury and the Ideal Home TV shopping channel, after previously hiring from Tesco and eBay. In a traditional media market of endless redundancies, Immediate is a genuine growth business and a steady employer of some of the UK’s top media talent. It’s a magazine-centric company with a never-ending stream of positive news and, now, the deal which gives Immediate an unrivalled set of children’s media licenses with the BBC, LEGO and Disney. For Burda, the acquisition of Immediate this year almost doubled its international business to some 40% of revenue and the UK is now its largest market outside Germany. In addition to Radio Times, Immediate has some 50 brands in the specialist magazines sweet spot. Its key brand include: Gardens Illustrated, Cycling Plus, MountainBike UK, Triathlon, Cross Stitcher Gold, Olive, Lonely Planet Traveller, and BBC titles Top Gear, Gardeners’ World, History, Good Food, and CBeebies. CEO Tom Bureau (as much tech as traditional media) is an under-stated but unmistakeable media industry star. But lesser rivals can be heard to snipe at the way Radio Times has bankrolled his company. They are missing the point. Immediate has a robust strategy for its “high-value special interest markets”. Its motivated team is bubbling with ideas, the company is spending £4m a year on R&D, and still manages to be more profitable than its larger peers. Immediate’s almost as good with data as print, and has cracked the major challenge for so many traditional groups: how to create ‘new’ media in existing markets without subordinating it to long-established print brands. While Radio Times (and other print magazines) still dominate the financials, hundreds of Immediate people are focused solely on digital media, e-commerce and events, and the success of digital projects like the wedding app Hitched and MadeForMums shows the strategy is working. Although it is very much a work in progress (and we might expect some bigger acquisitions to accelerate the growth in retailing and events), this is not the beleagured magazine market. Nor is Immediate’s parent company. In 110 years, the privately-owned Burda has grown into one of Europe’s largest and steadiest lifestyle media groups. Its real rise to prominence began in 1949 with the launch of Burda Moden, now called Burda Style, a sewing pattern magazine published in 15 languages. The Munich-based Burda now has one of the world’s largest databases of digital sewing patterns. The company is increasingly international. Across 20 countries, the €2.7bn-revenue Burda publishes more than 300 magazines, including the newsweekly Focus, celebrity magazine Bunte, and local editions of Elle, InStyle and Playboy. For the past 20 years, Burda has been funding digital startups and investments include: Etsy, Baublebar, Vinted, M.Gemi, Nebenan.de, NotOnTheHighstreet and Zilingo. Owner Hubert Burda multiplied his inheritance during 25 years running the company. In 2010, he handed over day-to-day control to its first non-family CEO, former McKinsey consultant Paul-Bernhard Kallen who has presided over undisrupted growth. London insiders contrast his trusting, hands-off Burda management style with the micro-focus of Hamburg-based Bauer (which itself had once tried to buy the former BBC Magazines). The numbers tell the story of Burda, as a company which doesn’t meddle in the management of subsidiaries: it has almost 12,000 employers in 20 countries but a headquarters team of only 30. It’s working.
Exhibitions. Reed Exhibitions has formed a new joint venture company, Reed Exhibitions Hengjin, with Shanghai Forever Exhibition. The company will manage the Automotive Manufacturing Technology & Material Show, China’s leading automotive engineering trade show, as well as the co-located Assembly & Handling Technology Exhibition. In 2018, the two events together were 100,000 gross sq m and hosted more than 77,000 professional trade visitors, exceeding 2017 visitors by 12%. Reed Exhibitions Hengjin will also organise a series of related conferences and seminars across China throughout the year. Michael Cheng, President of Reed Exhibitions China said: “The automotive manufacturing industry is a core pillar of China’s economy, contributing 11% of China’s total GDP. This new venture enables Reed Exhibitions to expand further and establish a strong foothold in this market.” The next edition of the annual event will be held 3-6 July 2019 at the Shanghai New International Expo Centre.
MidOcean Partners is acquiring and merging Hanley Wood, the B2B information services company serving the US residential construction industry, and Meyers Research, the provider of real-time market data to the homebuilding industry, which was previously a subsidiary of global real estate investment company Kennedy Wilson. Through Metrostudy and Zonda – the respective data products of Hanley Wood and Meyers Research – the combined company will offer data spanning the full homebuilding lifecycle, from land acquisition and property development and build, to new home sales and marketing.
Exhibitions. Messe Frankfurt Exhibitions has acquired the biennial Clean Show which it will organise with five former sponsors. The 2017 show was held in Las Vegas and had 11,000 visitors and 481 exhibitors. The 2019 show will be held 20-23 June in New Orleans. Future events are planned for Atlanta and Orlando in 2021 and 2023 respectively. Messe Frankfurt will organise the Clean Show in cooperation with the former owners, five US trade associations that include Drycleaning & Laundry Institute, TRSA, the Association for Linen, Uniform and Facility Services, Coin Laundry Association, Association for Linen Management, and Textile Care Allied Trades Association.
Music. Apple has purchased Platoon, a company that helps independent artists fund, distribute and market their content using analytics to source talent, and figure out the best way to target and market content. London-based Platoon was founded in 2016 and has 12 full time employees. Transaction terms were not disclosed. TechCrunch’s comment ahead of the the deal is interesting: “Spotify has made some significant moves to by-pass record labels and work directly with artists, and there are signs that Apple could be eyeing up a similar approach to get a bigger share of original content.”
B2B information. Vista Equity Partners is acquiring 7Park Data, a software and data analytics provider to institutional investment firms. Financial terms were not disclosed. The New York-based company uses machine learning and predictive models to transform unstructured information into performance indicators. 7Park says the 150 firms it works with worldwide include sophisticated investment houses and Fortune 500 companies, who depend on its software for benchmarking, forecasting and product development.
B2B information. Experian is acquiring African credit bureau Compuscan for $263m. Founded in 1994, Compuscan is a leading provider of credit information holding records on 26m people and 200,000 businesses in South Africa. It will deliver $35m revenue in 2018.
B2B information. Founded in Toronto in 2012, Quandl is used by 8 of the top 10 hedge funds. It provides alternative and core financial data from over 350 sources to more than 30,000 active users. Transaction terms not disclosed. Quandl provides alternative data and core financial data from over 350 sources to more than 30,000 active monthly users. The company offers a global database of alternative, financial and public data, including information on capital markets, energy, shipping, healthcare, education, demography, economics and society. Nasdaq plans to combine Quandl with its existing Analytics Hub business within Global Information Services.
Classifieds. Apax private equity is acquiring the New Zealand online market place Trade Me for NZ$1.75bn. Trade Me is a public company launched in 1999 and now has more than 600 employees. Apax won a bidding war with Hellman & Friedman. Trade Me was founded by Sam Morgan who sold it to Fairfax Media in 2006 for NZ$700m. The Australian publisher, in turn, floated Trade Me in late 2011 at a valuation of NZ$1.07bn. Trade Me is an attractive target because it is a leader in the New Zealand online classified market for automotive, jobs and real estate, and Morgan Stanley sees plenty of upside for future investors: “We estimate that, in New Zealand, only 60% of ad dollars will be online in 2019, versus a more mature Australian market at 90%. This underpins Trade Me’s earnings growth trajectory.”
B2B information. The UK-listed Euromoney Institutional Investor plc (Euromoney) is buying The Deal (an M&A database) and BoardEx (profiles of business leaders) from TheStreet Inc in a transaction which highlights the divergent fortunes of two financial media groups. On the one hand, the cashed-up, increasingly US-focused Euromoney is paying $87.3m for two subscriptions businesses that cost TheStreet just $28m in recent years. On the other, TheStreet is selling assets whose $25.2m revenue is some 50% of the whole company. And, while Euromoney’s own broker may be exaggerating its expected 25% profit margins (leading them to declare the price of 12 x EBITDA), the acquired B2B businesses still might account for most of TheStreet’s profit. Which just shows you what has happened to the 22-year-old New York company whose value peaked at $1.7bn in 2014 and is now below $80m. The company was founded by Jim Cramer, journalist turned hedge fund manager and celebrated TV host (CNBC’s Mad Money), and Martin Peretz, publisher of The New Republic. The sale to Euromoney follows TheStreet’s divestment of RateWatch to S&P Global for $33.5m. Those deals, heavy staffing cuts and new paywalls have been the back-to-profit highlights of the three-year reign of former USA Today editor-in-chief Dave Callaway. The newspaper veteran is now expected to quit as CEO of TheStreet after pointedly saying the board had decided to make this latest sell-off. For the once-sprawling Euromoney, which generates some £110m of EBITDA at a 25%+ margin, it is the largest acquisition of a post clear-out spree by CEO Andrew Rashbass (ex Reuters and The Economist). Whisper it softly but the three years since his appointment have changed plenty of soft things in a company once known as much for a somewhat bullying culture as for brands like Institutional Investor, BCA Research, Metal Bulletin, Insurance Insider, and Euromoney itself. More visibly, the Euromoney revolution started with the 2016 sell-down of what had been parent company DMGT’s majority stake. Then came this year’s disposal of the low-margin Hong Kong-based Global Markets division for $180m, followed by the $20m acquisition of Random Lengths, a Price Reporting Agency for the global wood products industry. Many investors expect more PRA deals and, in that sense, the acquisition of The Deal and BoardEx was unexpected. But the £1.4bn Euromoney also likes subscriptions (almost 60% of current revenues) and events. That’s why it’s expected to bid for Centaur Media‘s The Lawyer. Even at the highest price touted (£40m), The Lawyer would only take 50% of Euromoney’s net cash. It could be one way for the rejuvenated UK company to celebrate its 50th anniversary in 2019. But there will be plenty of others.
B2C digital. CarGurus, the Nasdaq company which claims to be the largest online car vendor in the US and also the fastest-growing in the UK (where it’s still tiny), is buying PistonHeads from Haymarket Media Group for a price believed to be £12-15m. The perfectly-branded online platform was launched in 1999 and acquired by Haymarket for almost £3m eight years later. Over the past 11 years, PistonHeads’ distinctive editorial tone and and busy used car marketplace have helped to multiply its audience from 900k to a steady 4m monthly uniques. It is believed to have consistently generated EBITDA of some £1m at a 40% margin. While it has become the quintessential online community, it has never been able to compete directly with the £300m-revenue AutoTrader as must once have been envisaged. The sale underlines the privately-owned Haymarket’s transformation into a largely B2B information, content marketing and events company (where it all began more than 60 years ago) focused primarily on well-established media and events in the marketing-communications and medical sectors. Its key brands include: Campaign, Media Week, PR Week, GP, Medeconomics, Mims, and Management Today. The £100m-revenue Haymarket built its reputation by giving B2B magazines (like the legendary 50-year-old Campaign) the design and content values of the sharpest consumer media. It was a pioneer too in the highly-profitable awards ceremonies that now crowd every B2B market. It’s always been great at events. Although Haymarket retains some consumer brands (notably WhatCar?) it has sold most of them to: Future (including What Hi? and FourFourTwo); Kelsey Media (Stuff); and Autosport Media (Motoring News, Motorsport, Autosport, and F1). The company’s strategic slim-down followed the £80m windfall sale of its Thames riverside film studios which substantially paid-off its long-term debt. The sale of PistonHeads, similarly, to a hungry buyer (presumably prepared to pay some 13-15 x EBITDA) could not be passed up. It’s somebody else’s turn to have a go at the UK’s mighty AutoTrader. CarGurus has been hunting in the UK for the past year and is believed to have bought PistonHeads on the rebound from losing out to Ebay in the October sale of the more mainstream Motors.co.uk. It remains to be seen whether the definitively non-mainstream PistonHeads really can help CarGurus (anymore than it did Haymarket) to conquer the non-enthusiast market in the UK. The mass market generally seeks relief from the pain of buying a car while PistonHeads’ disciples wallow in the pleasure of it all. CarGurus was launched in 2006 by Langley Steinert, the under-the-radar co-founder of TripAdvisor. He says the idea was to create the “TripAdvisor of cars”, a site where people could read reviews from other users about their experience with their cars: “So we allowed user reviews, and we actually had a wiki model where people could edit articles about certain cars. And, at the end of it all, it didn’t work. I mean, we had some traffic, not a lot of traffic. We weren’t generating much revenue, and we certainly weren’t gonna be able to build anything of any substance. So I think we were about a year and a half into it, and I huddled with the six developers we had at that point and said, ‘Guys, this isn’t working. We’ve gotta try something else.’ ” Plan B was the site’s re-engineering with proprietary technology, search algorithms and data analytics “to bring trust and transparency to the automotive search experience and help users find great deals from top-rated dealers”. The re-vamped site sought to answer some fundamental consumer questions: Which dealer has a car like this? What is a fair price for this particular type of car? Have others had a good experience buying from this dealer? Used cars are assigned one of five Deal Ratings: Great Deal, Good Deal, Fair Deal, High Priced, or Overpriced. It worked. The 2017 revenue was $316.9m (60% up on the previous year) with EBITDA of $24.1m. Steinert notes that, both at TripAdvisor and CarGurus, a deliberately low cost-base enabled him to keep the ‘burn rate’ under control and, therefore, helped him to switch strategies after early disappointment. That might just be a lesson for another motoring-media digital business. Enter DriveTribe, a much-hyped motoring site which two years ago looked like The Next Big Thing for car nuts everywhere. It was launched two years ago by Jeremy Clarkson, the punchy former host of the BBC’s world-conquering Top Gear TV programme and the team which now fronts Amazon Prime’s Grand Tour. DriveTribe’s CEO Jonathan Morris, fresh from fin-tech startups, described the commercial model as embracing content creation, distribution, and data insights. Well, some were impressed. 21st Century Fox and Bayer invested $12m (£9.4m) in the platform, alongside millions from Clarkson and his Grand Tour team. The TV presenter described DriveTribe as “YouPorn about cars”. His on-screen colleague Richard Hammond has said: “Gamers have got Twitch, travellers have got TripAdvisor and fashion fans have got, oh, something or other too. But people who are into cars have got nowhere. There’s no grand-scale online motoring community where people can meet and share video, comments, information and opinion. DriveTribe will change that. And then some.” Big ideas, and the site today has thousands of different ‘Tribes’ which group together content or conversations on specific topics. Sounds like the kind of powerful community engagement that the PistonHeads team would recognise, even if they never had Clarkson’s budgets. But that’s where the good news ends. In 2017, DriveTribe’s scored pre-tax losses of £8.3m after losing £4.2m in the previous year: more than £12m burned in just two years. The statutory accounts show it generated nil revenue in its first two years. Zilch. Just to complete the picture, staffing costs and headcount increased by 80% in the second year. The company could assert it was a ‘going concern’ because its balance sheet was stuffed with £6m of cash, courtesy of its star-struck investors but that will soon be gone. The air is thick with stories of rich advertising deals for Audi and Renault, and millions of users are said to be posting to it, taking part in live chats with other tribe members, sharing ideas, videos and experiences or playing online quizzes. Millions more are said to be consuming DriveTribe content on social media. But there are plenty of doubters: one online journalist noted in August that “the site’s monthly traffic seems to have been so minimal that it hasn’t appeared on ComScore at all so far in 2018, and the few months it was there in 2017, it was under 100,000 monthly uniques in the US”. In 2018, DriveTribe’s third year has been marked – hooray – by its first revenue. But the alarm bells are ringing, and the media-star founders are in London searching for new investors or even a trade buyer that can be as impressed as the original funders. Phew.
Broadcast. In the US, Nexstar Media Group has agreed to buy Tribune’s 42 television stations and cable network in an all-cash deal. The merger will form the nation’s largest TV station company. If approved, the combined company will own more than 200 TV stations and cover 39% of US households. Nexstar will now gain a foothold in major markets, including New York, Los Angeles and Chicago for the first time, plus a cable channel (WGN America) and a 31% stake in Scripps’ The Food Network.
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